This is a long-running dispute which has now reached the point of a complaint filed in the courts in Germany.
The publishers get traffic, but feel that Google should pay them for displaying the news in the SERPs.
This could easily go the wrong way for the publisher by google choosing to de-list the publisher entirely. Can you imagine the consternation at the publishers if that did happen!
There is no easy answer to this one, and the Internet has made it simple for anyone to pick up news content. Don't list it and someone cries foul, or list it and not get paid for the production of the news. Here's the problem with news, it's everywhere, so there's always somewhere else to go for the same news.
Additionally, a great deal of news being broken by users on social media, although it's usually a journalist that makes something of the story. Personally, i'd rather get my news from a quality journal that can make sense of the whole story. Thereby lies the conundrum: Who pays for the production of that news!
They justified the step by saying that Google still did not want to pay to use their publications: "So bringing a civil claim before the responsible court is the only way to enforce the ancillary copyright for press publishers against Google," the VG Media spokesman said. German Publishers Lodge Lawsuit Over Google Payments For News [reuters.com]