Living here for a few months is nothing! It would take decades of close reading to fully understand the strange exotic creature that is the British press (they capitalize it here: the Press). Some of that reading would be very pleasant, what with the fine, lively, and unabashedly editorializing writing that appears in the news columns (any Briton will happily inform you that the American newspaper tradition of dutifully airing both sides of an argument is dull, dull, dull). Some of the reading would be infuriating, as when you turned to page three of the Sun, Murdoch's popular tabloid, and found yourself staring directly at a young woman's naked breasts. The women with the breasts are called Page Three Girls, and they appear every day, which must mean that at least some of the Sun's 3.7 million readers don't mind reading a cut-rate, low-rent version of Playboy at the breakfast table. "I buy it just for the pictures--I never read the articles!" (In a strangely pious move, the Sun at one point pledged to feature only un-surgically enhanced breasts. Take a look at tomorrow's picture, and tell me what you think about that.)
The parochialism that you mention is truly startling, in a nation that is indeed part of Europe, that has a reputation for sophistication, and that is supposed to be moving more closely toward the continent. But this is a country in which a respectable plausible argument against building the Channel Tunnel was the fear that rabid bats and foxes would hitch rides on the trains, or use their long-distance skills to traverse the tunnel on foot (or through the air) and spread Black Death-style pestilence throughout Britain. Sometimes I think Britons believe every foreigner has rabies, at least metaphorically.
The papers love stories that cast their European friends in a bad light. Sometime last year, the baggage claim system at Heathrow Airport broke down, causing mayhem and leaving thousands of travelers stranded with the wrong luggage, etc. I can't remember whether the French or the Germans designed the system, but the Times mentioned it in its lead, as in "The German-designed baggage claim system...." (as if that, of course, explained everything). Last year, during the World Cup, the papers became obsessed with what they considered the inadequacy of the tournament's French organizers, and freely made references to Gallic incompetence, typical French bungling, etc. One paper printed a story in fake Franglais from its garlic-eating French correspondent, "Jean L'Onion," while another paper stopped calling them "French" and just went with "Frogs."
In addition to Europhobia, which I suspect is increasing--or at least becoming more overt--in these nervous times leading up to (maybe) full monetary union, there are other reasons for the papers' obsession with British stories: 1) Most of the papers are too poor to finance tons of foreign bureaus; 2) Britain still wants to believe it's the most important country in the world; 3) The papers are engaged in a brutal circulation war and as a result have become a lot more "reader friendly"--i.e., they print more gossipy, "fun" stories and fewer serious pieces that might turn short-attention-span readers off. Strangely enough, for serious news presented in a thorough, thoughtful fashion, many Britons turn to ... television.
Don't forget to buy the Sun tomorrow!