The media failed on this story big time for a couple of reasons, a big one being the general lack of Internet investigative journalism skills.
By now we know that a lot of journalistic enterprises seriously dropped the ball on the story about how Manti Te'o's girlfriend turned out to be a hoax.. That includes, by the way, Deadspin itself. Timothy Burke, one of the guys who broke the story, said he only began looking into it based on an email tip. I don't say that to try to downplay the reporting he and Jack Dickey did, because they did a fantastic job, but the point is that everyone missed this thing. Everyone. If Deadspin (or anyone else) doesn't receive that tip, then the story doesn't break until Notre Dame and/or Te'o's camp decide to make it public.
I wish I knew precisely how much to take reporters to task on this, but I don't. I'm not a journalist by trade and never even took a class in it in college (WCB all the way, baby). At least one person did a cursory job of fact checking it. ESPN's Gene Wojciechowski says in an audio clip here that he tried unsuccessfully to find a Lennay Kekua obituary, but he stopped pushing when Te'o said the family wanted privacy.
It's hard for me to fault people too much for stopping there with traditional reporting. Not only is the idea of hounding a grieving family for details about a death distasteful, but there's also the dimension that college athletics reporters are very uncomfortable about digging into players' lives on any issue unrelated to eligibility. How many times have you heard, "They're kids! They're not professionals! Let them enjoy their youths!", right? It's not a bad perspective to have, either.
But star college athletes exist in a weird no man's land where public attention makes them celebrities but the amateurism requirement keeps them from being fully compensated professionals. That fact makes drawing the line on reporting very difficult to do sometimes.
I did say, however, that I can't blame the media for stopping there with traditional reporting. The fact of the matter is, the training these guys got in traditional reporting is wholly inadequate for doing investigative journalism on the Internet.
Burke and Dickey have skills that I'll bet a lot of reporters don't. They knew how to use services that archive deleted Twitter posts. I wonder how many regular reporters even know such services exist. They are very adept at searching through Twitter's archives, which, if you're not familiar, is extremely difficult because Twitter's own search functions are laughably bad. They knew where to go to and what to do to find the origins of the swiped Facebook images that became Kekua's public face. They know how to use the Google cache, too. Those are skills that can't possibly have been taught in journalism school when any of the other people covering Te'o's career went to college.
I can't blame Wojciechowski for not pressing families after not finding the Kekua obituary. I can blame him for making that the end of the road. Burke said on Anderson Cooper 360 that his and Dickey's next step after not finding online evidence of Kekua independent of Te'o stories was to start making calls. They contacted Stanford, her supposed alma mater, and then all of the mortuaries and funeral homes in her purported city of residence. Finding nothing to corroborate any of the Kekua stories prompted them to dig into the photos and so on.
Those actions required no special Internet-fu to perform and would seem to me to fall well under the umbrella of traditional reporting. At least Wojciechowski did look into it somewhat. I'm not sure if anyone else actually did.
With that said, the mindset, to whatever degree it exists, that reporting stops when there are no more people with whom to talk needs to end. If any part of a story at all intersects with the Internet, then there's a trail that can be followed. Reporters need to get up to speed on how to follow those trails as soon as possible.
Addendum: SI's Pete Thamel also noticed some irregularities like the missing obit, but he too chose to file his story anyway before finding a complete explanation.