They released a new version and members hated it They had no way of rolling back to the older version. http://searchengineland.com/digg-v4-how-to-successfully-kill...

tl;dr: Digg was the original reddit - much bigger, reddit was the underdog.

Digg did a redesign that was absolutely horrible and created a huge backlash. Because Digg did not create a backup/proper versioning, they couldn't go back to the old design, and people migrated to reddit. The rest, as they say, is history.