While everyone seems to lament the demise of "live and local," it is important to note just who is making these comments. Mostly, it seems to come from people who are closely associated with radio, either by profession or avocation. That is a minority segment and may represent a minority position.
I frequently wonder the general public actually cares? In over eight years of operating a local radio station, I can’t recall anyone asking me why we didn’t have live DJ’s. We actually do have one (who is very good) on Saturday night. The funny thing is after his first show, I got comments from listeners who were concerned that their favorite station might be changing and they’d have to listen to incessant babble instead of hearing the songs they enjoy.
I suspect that most people do like a "local flavor" to their favorite station, but the "live" part may be optional - or even not preferred. If it is live, then it had better add something to the listening experience. A lot of local talent does not do that very well and in fact, they can make the station sound worse, not better. Perhaps they aren't allowed to develop, or maybe they aren't capable of it. The truth is, not everyone is fascinating to listen to.
It isn't that hard to come up with an automated format that sounds local. Doing so makes the economics of running a smaller market station much more viable. In many situations, this may be the best compromise.
I have to admit that I get a bit nostalgic for the days when there was a live person spinning records from a storefront window in many mid-American cities. It was very cool, and made a big impression on me as a kid. But that was another era. While I remember the good parts of that time, I have to be reminded of just how different life in America was back then. A lot has changed. Some of it is for the better, some for the worse. If radio has any redeeming factors, one of its greatest is its ability to roll with the punches and adapt to changing times. The advent of new competing technologies is just another hurdle. I suspect that “broadcasting” will be with us for a very long time.