I suspect it's less dumb that you think. Granted, the premise -- and the conclusion -- were badly misreported in the news, but that's par for the course really. I think it, and similar studies, are fairly interesting as a commentary on what passes for "news" and journalism in general today (and I'm not "aiming" just at Fox).
As for composition... with a vocabulary size of around 10,000 and the reading ability hovering at the 8th grade level, it's not looking good for the average American when it comes to reading or writing.
Trying to do a study about anyone who gets their current event news from one station, whether it's Fox, CNN, MSNBC, etc., is really stupid IMO. That kind of "study" is not a commentary at all on what passes for news, when they all report the same news. In terms of major current events, they all report the same stories, for the most part. (Talking about their hard news shows.) The opinion shows are much different and have a big disparity in terms of what is discussed, etc. The only exception is the enormous pass the media gives to Obama.
As for composition, people trying to make veiled digs, when their composition is atrocious, could be the subject of a study, athough it would be a waste of time and money. And writing at an 8th grade level is actually a good thing. Writing should be as simple and clear as possible.
