Think of all the people you need to print everything out before the next morning - you need a big enough staff of editors and reporters that you can get everything ready in a short time frame, you need the staff to handle the printing overnight, you need drivers to deliver within a 3-ish hour period and the staff to coordinate and load them up

Meanwhile, for a website, a team of 5 developers/devops could handle all of it. You still need journalists and editors, but they are no longer on the same time frame - they can just release things as they're ready, and maybe curate an email for the day and what appears on the homepage.

As far as paper and print costs vs hosting costs? If each paper cost 1 cent, were talking like between .01 cent and .0001 cent per page view, maybe even a tenth or hundredth of that. It adds up quickly, but compared to paper and ink?