The reactions to Dan Gilmor’s open letter on Bayosphere have fallen into two camps — lessons on start-ups and lessons on the dynamics of citizen journalism.

These perspectives, while important, miss the critical question in middle — who will fund citizen journalism, or any journalism, for that matter? As Justin Fox puts it in his must-read Fortune piece, Out with old media; in with… what?, “Are Americans willing to pay for what’s good for them?”

If it’s everyone for themselves in a free market of distributed content, is the free market going to value journalism (citizen orotherwise) enough to pay for it? Is the free market going to pay for community reporting, much less muckraking and correspondents in war zones? To me, the big issue that Bayosphere raises is not about start-ups but about who’s going to be minding the store of the “greater good” in journalism after we’ve destroyed the old economic model that funded it.

I worry that if we follow the online start-up model and embrace the practice of citizen journalism while putting the business model off until later, the entire practice of citizen journalism will be limited to the world of non-profit and its limited reach, which is not inherently a bad thing, but it’s hard to have a revolution when nobody hears about it.

And do we really want a Wall Street-like free market directing the creation and distribution of content? Do we want the world of “mass-reach” content to reflect the inane dross that often shows up on Reddit? — that’s what you get when you let the market/people decide. Or, as the NYTimes points, you get MySpace:

For better or worse, the media world of the future may well be Wayne’s. There is no better way to see this than to venture into, a jungle of clashing colors, blasting sounds, lurid images and banter so dense that anyone over 25 quickly becomes lost. The lesson here is that on MySpace there is no distinction between personal and mass media. A teenager can post a photo from last night’s party, a poem for a lost boyfriend, buttons that play her favorite song and a clip from her favorite TV show.

Justin raises the prospect of the Corporation for Public Broadcasting being the sole entity funding journalism for the public good — do we really want all journalism to be in the hands of a Congressionally funded entity? NPR makes independent non-profit funding go a long way, but there’s only so much to go around.

While I respect Dan Gillmor’s decision, it should be a wake-up call to the citizen journalism movement — Web 2.0 has shown that publishing in the hands of VCs and technology companies does a poor job of serving the average consumer. If citizen journalists can build a better app to help the average person stay informed without drowning in media, the world, and the money, will beat a path to their door.