Rose, who succeeded Jay Adelson atop the social sharing service, explained the elimination of the DiggBar in a post on the Digg Blog:
Framing content with an iFrame is bad for the Internet. It causes confusion when bookmarking, breaks with iFrame busters, and has no ability to communicate with the lower frame (if you browse away from a story, the old digg count still persists). It’s an inconsistent/wonky user experience, and I’m happy to say we are killing it when we launch the new Digg (sign up for the beta here). That said, we will continue to iterate on our browser extensions for Firefox, Chrome, and IE. Look for seriously revamped versions of those in a few months.
Also, with the launch of the new Digg, we will be unbanning all previously banned domains. While we will apply automated filters to prevent malware/virus/TOS violations, no other restrictions will be placed on content.