What killed Digg though, wasn't any change in look at feel, as much as a fundamental change in content policy. It went from 'users submit stuff and upvote it' to 'content publishers can automate a firehose of their stories into the system for a price' people didn't like that.
I'm seeing a similar parallel to Reddit's new profiles though. Not exactly the same but it's a move to appease the content publishers that has been angering their core userbase.
The way I remember it, Reddit had pretty much already beat Digg by the time they attempted the redesign and pivot (which largely went hand-in-hand). Those changes were just the final nail in the coffin. But as far as Digg was competing with Reddit, Digg hat already lost.
For me Digg's real problem was that a small cadre of politically active users figured out how to hijack the site and steer it the way they wanted. That's why I left. Reddit did a way better job of sandboxing those people.
I believe Reddit had already surpassed Digg by then. Digg's redesign may have been in part an attempt to respond to reddit's rise, rather than creating it.
Reddit was growing, but the Digg exodus gave it a significant boost. I don't know if Reddit was larger than Digg at that time, but even if it was, a near-doubling in users is a pretty big jump.
