Agreed. Digg has a similar nature as the laissez-faire economy - the lesser content will be automatically regulated and the quality content will get its deserved traffic (while in some cases that may tend to be a little overwhelming).
Your thoughts on Digg promotion is apropos. Digg itself is ultimately a profit vehicle, and I would Digg anything I submitted too (shameless self-promotion or not, there is a reason I publish what I publish).
Don't be suprised if you find youself burried if only motivation for using digg is to generate traffic. Like with any product value is what moves things up and really gets the attention of diggers - who value things like Snakes on Planes, AJAX, Ruby, cheap deals on hardware, all things Apple, Nintendo, web2.0 and a hand full of others. Blog posts will typically receive traffic if they are of the HowTo nature, or have some really good tech gossip - like the information surrounding the release of the MacBookPro. They, however, will not see the time a genuine valueable tool, or affore stated interest in it's native habitat.