The key is that you have to have something unique to offer: either your writing style or the information you provide, or the overall concept. You need something that will set you apart from the crowd.Wouldn't Blogging reach a saturation point soon with everybody trying to do it and competing for attention?
It's getting harder to find a unique niche now that so many people are blogging for money, but there's always room for something better than what's out there. People will flock to the best resource in any category; it doesn't matter if there are 50,000 other bloggers writing about the same topic as you: if your blog is the best one, you'll get the most traffic.
To be the best requires you to do a lot of work, so I wouldn't view blogging as easy money. Bloggers who earn $60K/year are often working 60-70 hours a week at it. But if you set your sights lower you can do something on a smaller scale that will bring in a few bucks to supplement your retirement income.