My emphasis added...
...it doesn't seem useful because when users want news they'd go to the News section
Google has been constantly running tests and has analyzed a huge amount of data over the years to determine user intent, and I'm thinking they have an extremely good idea when users want news. Google will have even a better idea when this algo has run for a while.
The "News-Wave" algorithm, as I see it, is only targeting short, general queries, the kind of query that is so broad that it's often not productive. Historically, searchers have needed to add modifiers to broad queries to come up with results that are useful. Google has offered suggestions via auto-suggest and has provided "Searches related to" type suggestions at the end of a serp... but many searchers ignore those and don't give Google much to go on initially. Many searchers don't click on the News tab either.
It might help to think of this as analogous to a search for "pizza". Most "pizza" searchers don't get into intent or location. Google has statistically determined, by looking at how these searchers follow up their one-word queries, that most are looking for a nearby place to buy pizza. What with mobile, Google has hyper-localized some queries even more than before.
Time is another dimension we live in, and QDF has been around for a while. With Real-Time data available, Google is now getting into extreme freshness, perhaps because the world is less patient and things are moving much faster.
I think that as more data comes in, we will see that not all the benefits of this algo go to major media... that established niche sites which are on top of things will be rewarded, and this will be not just about breaking news, but also about the kind of background information that becomes important when certain terms are trending high. Some of these, as netmeg suggested, could turn out to be on niche topics, and I'd also expect many to be local.
But, for the kinds of breaking stories and queries where you'd expect major media to have an edge, it's likely that they've had that reporting edge for quite a while... and that Google wasn't able to react to signals fast enough. Possibly, this adjustment will allow Google to depend less on freshness in general, and only react to the kind of freshness it values... and perhaps also to downrank some spam that's been sneaking through because it was fresh.
From what I've been seeing... on major news stories, some of the articles that are ranking in addition to top news reports, are what we've called "in-depth articles", which are relevant to the context of the trending query. I'm seeing some amazingly good results. Worth noting that on these searches, if I add even one extra word to move away from the extremely general query, the freshness factor seems to fall off considerably.