Here are some reasons why:
1) People are using it to submit stupid shit, rather than news. For instance:
http://digg.com/offbeat_news/Pictures_The_10_Most_Beautiful_Indian_Roads
http://digg.com/environment/Hawk_picking_up_Coyote_PIC
http://digg.com/tech_news/Digg_LOLCATS_edition
What's the problem with this? Well, on a personal level, I don't find them at all interesting. I sincerely doubt that someone has actually checked every road in India and ascertained that these are indeed, the 10 most beautiful. I also don't really care much about a Hawk picking up a coyote; I looked at it, it was interesting for a millisecond, but it really did nothing for me. I especially don't give a $#!^ about LOLCATS. In fact, they make me want to be cruel to little cats, and create pictures of them with captions like "I'M IN YOUR OVENZ, BURNING MYSELF ALIVE!".
More importantly though, it's ruining what Digg was, and should be. Digg carved out a previously-unfilled niche in the Internet: Social news networking. It was revolutionary, and it brought a degree of control and substance back to the individual. I hoped it was going to be a medium that balanced both information and public discussion. Why would this be important? Well, as Al Gore explained in his excellent book The Assault on Reason, the American political system is collapsing and displaying more and more signs of partisanship and corruption as it displays fewer and fewer signs of reason and public engagement. As Gore explained, this can be traced back to the increasingly concentrated ownership of media assets, and the decreasingly democratic means of political communication. In other words, there is no public forum. However, Digg could be that forum. When important news is 'discovered' and shared by individuals, and discussed in a public forum (i.e. on Digg's comments page), the problem of corporations' information oligopoly is resolved. However, if people begin filling Digg pages with insignificant distractions like that listed above, then there will be no space for important news and discussion. Digg will degenerate into a room full of ignoramuses. It will be full of the Internet's equivalent of television's celebrity watchers, puff pieces and '20 second grabs'. Think of it this way... LOLCATS and things like it are basically the Paris Hilton's of the Internet. They are distractions from real-world problems, issues and developments. In the context of human existence, LOLCATS are insignificant, and tomorrow they will be forgotten for another meaningless meme, having done nothing but distract many people from significant discussion on topics relevant to yourself, and everyone around you. Remember this woman? She may as well have been refusing to report on LOLCATS. Sure, some people might find memes funny (don't get me wrong, I find some funny), but Digg is not the place for them. You can have them in one place, and leave Digg for important things, but if you swarm Digg with stuff like this, then you destroy it as a forum for the public discussion of important matters.
2) No Pictures Section
Digg needs a pictures section. For a start, everyone wants one. Secondly, when there isn't one, people just fill the News section with stuff like 'The Top 10 Most Beautiful Photos in the World!!!' and 'The Best Picture You Will See Today!' (none of which have ever really awestruck me, btw). It is just one of the problems that contributes to the above-mentioned problem.
3) The New Comments System
The new comments system was a little difficult to cope with at first, and experienced a bit of a backlash, but really, it's not that bad. That doesn't mean there isn't room for improvement though. I suggest:
a) Limiting threading so that there are only one or two threads per original comment. Even though people say a threaded comments system is better for conversation, it's not. Well, it makes it a little easier to direct a comment at a specific person, but it seriously detracts from the overall quality of the discussion itself. Comments get lost in the number of hidden comments, and when a large number of threads exist, they clutter up the page, making conversation less fluid.
b) Showing both positive and negative diggs for comments, rather than just the total. Doing so would provide a much better indication of where public opinion fell on the comment. Think about it: a comment might have received 100 positive comments and 102 negative comments, but when the total is seen, it seems like a couple of people have taken offense to the comment, whereas there's actually a voracious debate going on!
c) Make larger comments boxes. Tiny little comments boxes make it very difficult to write anything of substance, and so people simply don't write anything of substance, reducing the intellectual quality of the comments page. Fortunately I use Safari 3, which lets me change their size (but sometimes reduces all my paragraphs into one giant block, which really pisses me off. I haven't worked out how to fix it yet.)
4) Partisanship
Arguments, flamewars, whatever you want to call them, it's because of peoples' disinterest in finding out the truth, rather than winning arguments. These days, people just seem to want to knock each other and win their little arguments, and so they support (i.e. digg) things that back their opinion, regardless of how biased or unreliable they might seem. Here's one of the articles that set me off on this bit.
Regardless of how unreliable the site, how poorly researched the material and how inaccurate the conclusions, almost a thousand people backed it, which really pissed me off. Listen, I don't care what conclusion you reach, as long as you reach it properly. Oh yeah, and partisanship raises another question. If you think a linked article is good, but the digg description has been shaped in a partisan manner, should you digg it? Here's an example. I usually don't. Furthermore, I disagree with making the descriptions partisan. It's OK prompting discussion, but arrogant to try to portray everything in a way that makes them fit what you think.
Let's hope that Kevin Rose and his trusty team work out how to fix the problems...