TED is great in its way, but it caters to, some would say flatters, an elite crowd of people - the type who buy expensive artwork for their houses - some of the stuff proposed there might sound great to the chardonnay-class participants but has little relevance in the real world.
Can design save the newspaper? Of course not, and merely raising the question with a straight face impressively demonstrates the out-of-touch, ivory tower, art-gallery-opening-attending disconnect of the speaker.
Such a question is, in my opinion, at least as prima facie ridiculous as posing that interpretive dance might save NASA, so the parent's comment is an entirely valid reductio ad absurdum.
In what way is the speaker out-of-touch? He has personally overseen circulation improvements of ~ 30 - 100% in the newspapers he has redesigned.
"Design" in this sense goes far beyond "graphic embellishment" and is actually about changing the entire product/company involved -- and thus very relevant to the future of newspapers.
A few quotes from his speech:
"It was my personal, intimate challenge to talk to the readers."
"the changes we made were not about changing the look, it was about changing the product completely"
"my bosses wondered, why is he asking all these business questions, why is he not showing us pages? This is the new role of the designer, to be in this process from the beginning to end."
From the presentation: "Did design do this? No. Not alone."
Mr. Utko recognizes that design cannot create a 20 to 100 percent increase in circulation. He isn't claiming that it can. He claims that if you "put your work to the highest possible level," you can pull off changes as successful as his.
I agree with your statement about TED, but this does not exemplify the "disconnect" of TED. It's ignorant to claim that his ideas are not relevant in the real world, since they very obviously increased circulation.
The most important slide from the presentation showed a Taijitu (yin and yang) diagram and made the following comparison: function is to form as content is to design.
The speaker doesn't suggest that design will save the newspaper, he actually says that the series of challenges newspaper printers face would destroy any company. The presentation is about how to do good design, not newspapers.