there's a number of reasons, but the biggest was a redesign by Digg (Digg v4) that ended up prioritising power-users and large publishers over smaller sites and users, leading to a mass exodus of the userbase to Reddit, which at the time was seen as more democratic (this being 2010 before the incomprehensible horrors of the next decade burnt out all goodwill towards anything newer than Web 1.0). Reddit also had an autofeed of news and links that were fed via RSS to Digg, and users pushed really hard to upvote any reddit posts as a protest and a way of trying to get other users to migrate.

interestingly, this happened at probably exactly the right time for Reddit's explosion in popularity to occur, if it never happened who knows how things would've shaped up