He's blaming poor coders for digg's failure, but he's the one who ultimately hired them (or at least started the ball rolling by initially hiring bad people) so really it's his failure.

Every company is inundated by poor applicants. One of the most important--maybe the most important--responsibilities of a founder is hiring good people. He failed at that responsibility.

How is he blaming them? The whole point of his argument is that he failed to bring in good people. As you say, "He failed at that responsibility."

+1 my point exactly