That doesn't seem to have happened here. Digg isn't popular, and I'd definitely stipulate that it's lower quality, but it still exists and functions as a general interest content aggregator thing.
New Digg is a resurrection of old Digg by a completely different company. [1]
The Digg v4 thing was a very big deal back when it happened. In a matter of a month or two, Digg lost the majority of its traffic to Reddit. I personally remember switching pretty much overnight after v4 when beforehand I always thought Reddit was inferior to Digg.
As I understand, Digg the original company was killed and drained of blood. The company that acquired the rights to digg.com as a result then re-launched it. The original Digg, the company, is long dead and buried.
The Digg v4 thing was a very big deal back when it happened. In a matter of a month or two, Digg lost the majority of its traffic to Reddit. I personally remember switching pretty much overnight after v4 when beforehand I always thought Reddit was inferior to Digg.
[1] https://en.wikipedia.org/wiki/Digg#Sale_and_relaunch
Edit:
Found an old graph of the traffic dropoff when v4 launched [2]
[2] http://i.imgur.com/FuqV9.png