Skippy (a great individual blogger that I'd been remiss in not linking to earlier) has been on an absolute tear over this "screw the little blogs" thing. Most of it is because he didn't take his delinking at Eschaton as calmly as your host did ("frothing rage" would be a better description), but he's pointing out all those issues of egalitarianism that are really bothering me about this whole thing.
It's really turning into a "big vs. little" conflict. Chris Bowers at MyDD was the source of the "screw you, kiddies" sentiment that seems to have turned this nuclear, Kos has been thrown into it, and it's turning into a huge slapfight all around. So it's not doing the liberal blogosphere any favors. For once, their conservative counterparts actually look good, because if there's one thing Instapundit is good at, it's linking to the little guys.
(Even if they're absolutely insane.)
There are other problems here, though, with this shift from independent blogs to group-blogs and subsidiary "diaries". I already mentioned that the one that bothers me the most is editorial freedom. If "diarists" are forced to choose between toeing the party line or languishing out in the wilderness, that's going to get reflected in their writing, and how readers perceive it. That charge against Kos from the wingnuts saying that he controlled the blogosphere was ludicrous because of independent blogs, not the Kos diaries, where he really could exercise that kind of control. The same is true of all sites that have subsidiary diaries, like MyDD and TPMCafe.
Another, more ominous issue is a financial one. Let's face it: if you're writing a popular diary, you're not seeing a dime. It's all going to the site admins. They might maybe share a little, but the advertising dollars are headed their way. There's a real problem there: administrators could start making a point of not linking to other sites' diarists and subtly encouraging their diarists to "keep it in the community", in order to maximize ad rates, clickthroughs, and revenue. The act of delinking an independent blog opens you up not only to the charge of being censorious, but the charge of trying to rub them out for financial gain... and even if you aren't intentionally doing that, the charge is going to happen.
This is a website design truth as old as the hills. Once you have a reader, you're supposed to try to hang on to them, unless they decide to click through something that you're going to make money on. That's also the absolute worst way to try to build a broader community; taken to its conclusion, it hives the Internet off into gated enclaves with strict moderation and little connection to the "outside world". Kos is already starting to kind of feel this way; The Huffington Post (as good a read as it is) definitely is. That's not what blogging is about, not at all.
Besides, if you want a big gated community, you should probably just go to the Something Awful forums. The actual Something Awful satire website, I feel, never quite survived the loss of Rich "Lowtax" Kyanka as a regular contributor, but the forums are probably the best (and certainly the biggest) around. Kos, MyDD, TPMCafe and the like aren't going to catch up to huge forums like this or uber-social sites like Myspace and Facebook, but that seems like what they're trying to do.
And, of course, it's a blow to internet pseudonymity, because the administrators can easily make real-world identification a condition of entry. Kos doesn't now, but Huffington does, and fear of lawsuits brought on by the complete lack of anything like common-carrier status might make that inevitable.
I don't think this is a positive development, and I'm absolutely shocked that Instapundit can see it and Kos can't.
In any case, I've added skippy to my own tiny blogroll, and I'll repeat his promise: link to me, I'll link to you. assuming you're progressive and your content doesn't make me want to punch something. I didn't have that rule before, and manually adding these things is a pain (I really need to set up a damned blogrolling bar) but heck with it. Let me know.