> Has there been a better example than Digg of how detrimental it is to alienate your users on the social web?

Facebook. It changed the day anybody (ie. parents) was allowed on. Now most people I know either refuse to use the service due to employer paranoia or just play Farmville all day, but it's not the same.

At least Facebook rolls with it, I suspect their new features (new Groups, new Photos) seem to cater towards their current audience instead of "getting the old spark back".