Eh. I absolutely agree with this analysis for the major subreddits. The ecosystem and quality of content has definitely decreased.

However, I still find plenty of very high quality content in smaller subreddits. I wasn't a Digg user myself, but I suspect the subreddit aspect of reddit is the difference maker: folks seeking HQ content can stick around in the smaller corners while the more popular corners of reddit become mainstream.

And here's an anecdote: over the years, I've noticed more and more of my non-technical friends becoming reddit users. But most of them seem almost oblivious to the fact that there are subreddits outside of the ones you're subscribed to by default.

[EDIT] - spelling, thanks sliverstorm