Not agree with all what you said. I saw many news site which are ranking for event/popular keywords in google for few days, but their overall ranking is very bad... they ranked on time using C&B.
Here is what my news story site was back when I had it. I bailed on it as I hated to have to reproduce someone else's work, hated having to be under a deadline for something that I owned and the return on the effort was not there for most days.
It was a business news site with 6 different categories... I don't want to actually share the categories as I sold the site to someone that is doing fairly well with it and that would be kind of crappy to do to him but they were business news related.
I had a different writer for each category (all of them were me under different pen names) and I rewrote stories just like you mention. I would rewrite as many as 10 - 12 a day and would get the traffic for the actual story as you are saying happens. I generated decent traffic on a regular basis, between 1000 and 1500 UV a day and I would get the occasional spike when I hit on something real popular.
A case in point; I wrote about some business that Boston Rob from the TV show
The Survivor was getting into and I hit like 8K UV for that article in just one day and the following days were decent as well but the traffic waned as expected. There were others that caused spikes but that was one in particular that I remember.
What happened after a while was that I was getting traffic to the site for many of the KWs in the articles that were not actually related to the news story itself. It could have been the way I rewrote the content and it could have been the way I backlinked the site or it could have been a combination... in any event I was getting that traffic to those stories months after they were written and published.
It is a solid long term method to build long term organic traffic if that kind of site interests you... like I said, I did not care for it after about 8 or 9 months of rewriting news stories. It is not as "passive long term" as I prefer for the kinds of sites I build and, for the effort, the revenue didn't add up for me. You end up with the
short term traffic like you are looking at snagging
and the
long term rankings for a lot of KWs that are part of your news stories.