I think this is unlikely as facebook generating media for consumption isn't part of their core competency. It's meant more to be a platform for connecting users together.
More compellingly, content generation could be owned by facebook if there was a limited set of content to generate. Farms produce some limited subset of crops (e.g. corn, rice). Netflix produces a limited set of tv shows. Netflix with only the shows that netflix creates wouldn't be as compelling without access to the other large corpus of shows. The same would be for FB. While it could be argued that FB could generate its own content, like Apple/Google apps on the app stores + other apps, I doubt that the cost/benefit of FB becoming their own content producing shop will ever be compelling enough to kick out the existing media companies.
You're right that Facebook will probably never completely kick out existing media companies.
It'll probably follow the Netflix model more closely: building specific pieces of content which it thinks are desirable for the platform and as a competitive edge against others.
One example: I envision Facebook expanding its "trending stories" feature to include a full-length in-house article about trending news.
Would you believe for a moment news published directly by facebook? What about the risk that they simply used your data as news? What about yesterday's fiasco, in which they digitally enabled support for fashionable Paris in geographic regions which have their own ignored tragedies?
I think this can be summarized into a cleaner formulation: by controlling the last mile, Facebook obtains the ability (though not the requirement) to absorb whatever components of the experience they choose.
This has always been one of Microsoft and Apple's biggest strengths (though executed with varying degrees of competency at various times for both of them).
Facebook isn't going to replace all existing publishers, but it very well might become a publisher for a few very profitable sub-niches / types of content.
Or more likely (again, a la Microsoft and Apple) simply buy quality publishers in those niches. Because quality, but under-supported publisher + first-party FB analytics, advertising ability, & platform control = a pretty winning play.
Something like Huffington Post owned by FB would be pretty powerful, and fit well within FB as an org and platform... The integration could be very clean given their understanding of your interests... there's already promoted articles, and other similar articles when you comment on something... adding in more FB control and integration could very well be a next step for them.
More compellingly, content generation could be owned by facebook if there was a limited set of content to generate. Farms produce some limited subset of crops (e.g. corn, rice). Netflix produces a limited set of tv shows. Netflix with only the shows that netflix creates wouldn't be as compelling without access to the other large corpus of shows. The same would be for FB. While it could be argued that FB could generate its own content, like Apple/Google apps on the app stores + other apps, I doubt that the cost/benefit of FB becoming their own content producing shop will ever be compelling enough to kick out the existing media companies.