Normally the story submitter avatar is displayed adjucent to the story.
Avatar is one of the easiest way to identify if the story is submitted by your friend(s).

I believe Digg wants to reduce the diggs from friends as a good network of friends circle can influence the number of diggs on not so good story and sometimes (could be majority of times) more number of diggs could lead to only those who have strong network of friends.

With this update, there will be less number of diggs from those users who diggs only the stories that are submitted by their friends.
Because they have to read the user names before digging the story.

If digg really wants to reduce the influence, why not it just remove the submitted by info on the upcoming list and just display on the individual story page?