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Very good questions OP. I think some of your conclusions are very accurate. We do compare our lives to what we see in the news. Bad news can make us feel good (depending what the "bad news" is), and good news can make us feel bad (depending on what the "good news" is).
But your line of reasoning gets a big muddled when you make the point about people feeling that they're morally straight people because they're not in the "bad news".
Sure, "bad news" provides us with "bad guys" who we can use as counterpoints to strengthen our image of ourselves as "good": dictators, war criminals, pederasts, and those dirty, dirty drug dealers, for example. People love to point fingers at "evil", "bad" people, and this is definitely a big reason why we see so much news about them.
But remember, "bad news" isn't just about "bad guys" - though they are a powerful trope. "Bad news" is also about hurricanes, floods, diseases, earthquakes, plane crashes, car accidents, and other acts that don't implicate a "bad guy" or any other moral judgement-making.
The truth is that "bad news" is simply more sensational; and sensational, eye-catching, attention-demanding news is what sells; and the media is a marketplace. Ergo: if it bleeds, it leads.
Humans are hard-wired to respond to a few different things. Sex is one of them. Fear is another. Stories about tragedies captivate us. They stimulate our adrenaline, our fear, our sympathy.
"Good news" just doesn't seem to have the same effect. If the stories are sensational, maybe they have a chance: Long-lost lovers separated by war reunited after 60 years. Missile blows up Palestinian nursery, everyone survives unscathed. The Berlin Wall has fallen. Good news can definitely move us, too. But it often lacks the sensationalism of the bad news.
Another appeal of "bad news" for humans is our fascination with transgression. Have you noticed the proliferation of mystery and crime novels? Or all the crime shows on TV? Culturally we are transfixed by acts that cross the lines in our society. Our cultural conditioning or moral foundation may make us look upon rapists, pedophiles, gangsters, corrupt politicians and so on with condemnation or disgust; but at the same time, we are shocked (sometimes, it seems, almost with admiration) at the boldness of their crimes.
Finally, on a totally different tangent, in our free-press society it's the job of the media to be the watchdog of the state. If someone anywhere is up to no good, it's the job of the media to know and report about it. If a white cop has shot an unarmed black kid, or if the educational systems of the country are failing, or if a politician is getting some under-the-table kickbacks from a businessman who profits from the politician's policies, then these are things that the media should and will report. Will those reports still be influenced by all of the above factors, including the sensationalism of the story, the demands of the market, and the political and personal interests of the writer, the editor, and the publisher of the story? Yes.