While I think you're absolutely right, I think Digg made a number of other missteps with the Digg v4 launch that Reddit did not make. In particular, they shut down the old Digg site to reuse the servers for the new one, a mistake that Reddit was particularly careful not to make.
Digg was also already on the way down before their failed launch, and before the exodus to Reddit - a condition that doesn't apply to Reddit today. People have been making Digg comparisons about Reddit before I worked there, and now long after I've left. I don't think the 2 are comparable.
Will Larson writes about it here: https://lethain.com/digg-v4/