the UX changes weren't the real problem, though they exacerbated the real problem. the real problem was a dramatic change in the content promotion algorithm that de facto transformed the front page of the site (which was much less cuztomizable than reddit's) into a corporate sponsored content billboard.
I don't care much either way about sponsored content - just relevance. I attribute Digg's downfall to when it started adding professional sports content to the front-page.
I'm looking at the Archive.org history and it's pretty telling what happened:
2007 - https://web.archive.org/web/20070613060232/http://digg.com/ - Slight redesign, but note the addition of the Sports and Entertainment categories - but at least an article on the Double Slit experiment has six times as many diggs as a Sports Illustrated gossip piece.
2008 - https://web.archive.org/web/20080730182035/http://digg.com/ - Zero pure technology stories or industry pieces on the frontpage at all - it's all general interest - the site's content is unrecognizable from four years prior.
2009, 2010 and beyond continue this trend.
Notice the similarities with Reddit - albeit Reddit progressing at a slower pace: Despite similar ages, Digg took five years to go from niche to mainstream, Reddit's mainstream appeal came after eight or nine years.
Reddit has the advantage of making it easy to opt-out of irrelevant interest areas, but it can't keep everyone happy. HN is my go-to for news because the content is relevant even without me having to log-in, but Reddit's default homepage is no interest to me unless I login, which I'm less likely to do from a computer I don't own.
There is tons of corporate sponsored content on Reddit but Reddit has learned from Digg's mistakes and made the ads appear like normal posts made by normal users.
Basically Reddit is what happens when product placement ads go to the extreme
