The Digg story just goes to show you that political metaphors don't always translate well into tech. Digg was never able to diversify content (read: expand, scale, grow) because it was never worth it for minority voices--and here I'm referring to non-liberal, non-young, non-male, non-athiest users--to attempt to carve out space and participate. The value proposition of helping diversify Digg's content wasn't worth the time to newcomers.

And so those users of other demographics simply went elsewhere to build their communities. The latest Digg was an attempt to push back against the niche that ruled Digg, but then that niche just found another community as well.

Real life democracies, in government, exist as a compromise simply because there isn't always the ability to pick up and move to a new nation state if you aren't happy with the local rules. On the web it's all too easy to move somewhere else, so typically all web communities are niches that push away newcomers who are different. On the web democracy does not give rise to real, long-tail diversity; it's just a quality filter.