Just as perplexing, why do they need ~68 employees ( http://about.digg.com/team ). My counting may be off by 1-2, but last I checked Reddit is coming up on them traffic-wise ( http://siteanalytics.compete.com/reddit.com+digg.com/ ), and only has 7 employees? And I'm pretty sure Reddit doesn't have 500 servers either, although I could be wrong. Both sites offer very similar functionality. While past its peak, Slashdot…
reddit uses something like 250-300 EC2 nodes.
I remember not too long ago before they moved to EC2 everything fit in just a few racks. Of course, their traffic has expanded significantly recently.