I'm looking at the Archive.org history and it's pretty telling what happened:
2004 - https://web.archive.org/web/20041214033211/http://www.digg.c... - Pretty much the same content as Slashdot, but with a cleaner UI.
2005 - https://web.archive.org/web/20050609031143/http://digg.com:8... - No significant change
2006 - https://web.archive.org/web/20060615092431/http://digg.com:8... New "Web 2.0" site design - less industry news, but still technology-centric.
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.