Although it's a topic I love talking about, I'll try to keep my opinion as short as possible. There is no need for Video Game Journalism, at least not from a consumers perspective. Every industry needs watchfull eyes to keep standards up and expose bad practice for example, but in regards to the products, there is no need for Journalism (nor is real journo work done in the games industry).

Games are a product that - from a consumers POV - needs testing and critique, as in the movie business for example. No movie reviewer would dare calling himself a Journalist - yet writers in the Games industry do. Gamers think it's more important and created this hilarious 'Hype Journalism' that indeed is nothing more then an extension of industry advertisement. Kids and youngsters are the core demographic and they don't give a flying fuck about how things should be approached (objective, neutral and with a lot of scepticism). They want to read/watch how awesome and cool the upcoming games are. If you don't pre-hype the games that they are so sure will be great, you won't get readers. Simple as that.

There was an interesting legal case in Germany back in the days that is quite interesting in regards to this, in my opinion at least. It is illegal in Germany to publish a 'review' of blacklisted games like Doom for example. The 'why' is quite interesting. A German court ruled that a review is basically advertisement and advertising blacklisted games is illegal.

In regards to your last question: I think games media needs to re-invent itself to be credible. Unfortunately, this will not happen, since the 'hype' is way more profitable then objective reporting.