
Libraries in the Kansas City area have definitely jumped on the social network bandwagon, though not Digg. Looking at Johnson County; Olathe; Bonner Springs; and Kansas City, Missouri Libraries, they all have links to their pages on Twitter and Facebook. None of them have any participation in Digg. Why is this?
One common complaint from Digg users is that a minority of the users control the majority of the content. If a user wants their story to be seen, they have to have a lot of friends who are willing to "digg" their content. It seems to amount to a popularity contest. If the people who you have as friends on Digg like you or the content you submit, it will get seen by the rest of the Digg community.
Another criticism is that a group of users can band together and "bury" all content that does not fit in with their ideas. Digg has no impartial judgement system to determine why a link has been "dugg" or "buried", and if there was just cause. The users retain the control, allowing for censorship.
An additional downside to Digg is that there is no comment moderation. Users are able to block profanity (and other users comments), but much still seeps through. A quick stroll through the comments on the top few articles can cause even the most thick skinned person to blush.
I believe that these criticisms are why local libraries have stayed away from Digg. The main content of Digg is current events or items from the web that people have found to be interesting. If libraries want to call attention to local events or news stories that pertain to the library, they will post this information on their website, tweet about it on Twitter or post a comment to their Facebook page. With each of these three methods, they don't have to worry about their message getting buried. Any offensive comments can be deleted. Anyone who has friended the library will be able to see the post and be informed (and likely not offended). The Digg system updates constantly with items from all over the web. Any links submitted by the library would need to be "dugg" by many others in order to stay visible. Each of the top 15 links for the past 7 days have all been "dugg" over 3,000 times. Looking at the number of friends each library system has on Facebook, none come close to that number. It's much easier for libraries to maintain their information on other social networking sites than to try and keep up with Digg.

References:
Fishkin, R. (2006, July 20) Top 100 Digg Users Control 56% of Digg's HomePage Content. Posted to http://www.seomoz.org/blog/top-100-digg-users-control-56-of-diggs-homepage-content
Hung, T. (2006, August 25) A Brief History of Digg Controversy. Posted to: http://www.deepjiveinterests.com/2006/08/25/a-brief-history-of-digg-controversy/
Mullen, S. (2010, March 10) The Power of StumbleUpon. Posted to: http://www.endgamepr.com/blog/2010/03/10/the-power-of-stumbleupon/