They let corporations submit blog posts (company spam, basically) and they'd instantly go to the top, pushing any normal submissions down into oblivion. Management thought that more ads will get them more revenue, but instead everyone just left.

It was a combination of factors.

They redesigned the website, which was a complete wipe of the service. All your submissions, comments, etc. Gone. That upset a lot of people.

They also changed their algorithm to prioritize paid promotional content over user submitted content, and they created a "power user" class whose content and liked articles would be more likely to reach the front page, too.

They changed the look and layout of the site dramatically, and also altered how things eventually ended up on the front page. It was in an effort to make more money via advertising/paid posts, and it literally killed the site overnight.

Reddit is doing their best Digg v4 impression right now. History doesn't repeat itself, but it sure as fuck rhymes.