A diversity-vs.-participation tradeoff? Well, maybe. I really like the term "polarization entrepreneurs," but I'm not really sure that the issue is the breadth of deliberation. In fact, I think that in many cases, interacting with those with whom we disagree can deepen division, rather than bridge gaps. My own experience is that being called names tends to make me want to dig in my heels and intensify my position, while a more reasonable approach often leaves me more willing to consider alternative views. I don't think that this characteristic is particularly unusual on my part, as people were observing millennia ago that a mild reply turneth aside wrath, while grievous words stir up anger. This suggests the possibility that polarization comes not just from people congregating in like-minded groups, but also from the lack of civility, though my own experience suggests that the two phenomena feed on one another: Nasty language and name-calling tend to encourage people to sort themselves into like-minded groups, partly because nasty language is off-putting and partly because people who expect to receive nasty attacks want a group of like-minded folks who will back them up when that happens.
Mark Penn (I'm reviewing his book for the Post, so it's much on my mind at the moment) notes that the punditocracy is more divided than the populace for this very reason: "The myth that America is hopelessly 'polarized' gets perpetuated because in Washington D.C. -- where most of the pundits are writing from -- everyone has to choose sides to survive."
So the increased polarization and lack of civility we're seeing in the blogosphere may be an example of amateur pundits imitating the professionals, and sorting themselves into teams for mutual defense the way inmates in prison, or teenagers in junior high, do. And certain terms of uncivil language become shibboleths, or gang colors: "Rethuglican," "Leftard," etc.
Some pressures probably incline the blogosphere to carry this to greater lengths: Newspapers and magazines presumably care at least a little about not narrowing their audience too much -- conservatives who don't like being called "Rethuglicans" are still worth having as readers if they help to sell car ads. Bloggers don't face such pressure to bring their work under an overarching brand. And professional pundits meet each other face to face at times, and are always grateful for book-plugs and related logrolling, also things that most bloggers don't deal with.
Of course, that's not always bad: You mention in Infotopia that Trent Lott's "genuinely scandalous" statements about the missed opportunity of a Strom Thurmond presidency "were ignored -- except on the blogosphere." Lott made those remarks in a room full of reporters, whose failure to report them was probably driven in part by personal familiarity -- and perhaps a desire for future access -- two things that bloggers are not similarly inhibited by.
That said, I've noticed a number of cross-blogospheric efforts: The opposition to FEC regulation of bloggers, or support for the Tripoli Six, for example, produced much cooperation among bloggers of different political persuasion, and I was invited to the YearlyKos conference this year and was sorry I wasn't able to go. (And we've had a touch of friendly rivalry on environmental goals, too.)
So "polarization entrepreneurs" do try to stir up rivalry, and they often succeed. But because -- as I mentioned below -- politics are more fragmented than polarized, people can often find things to agree on across the Red/Blue divide. In fact, some cynics may suspect that the Red/Blue divide is, at least in part, an effort to prevent people from finding things to agree on that might imperil current political coalitions. Despite the current degree of polarization -- and incivility -- I think that the long-term impact of the blogosphere will be to enable communities of interest that overlap, rather than hugging opposite sides of a chasm. I also think -- and I've written about it elsewhere -- that there's an upside to the sorting you describe: Unlike email lists that can be overrun by trolls, the blogosphere tends to route around idiots. I regard that as a virtue, too. Am I overoptimistic?