Summary of discussion on why it failed:
  1. Yahoo bought it, and mismanaged it. Did not let it adapt to changing market needs.
  1. Yahoo tried to monetize it too quickly, too aggressively. Yahoo forced Delicious to make features and code which went against the wants of its users, not features it needed to compete.
  1. Not enough of a “social network” like Reddit...
Not that many people are data-oriented enough to want to use such a service. Same reason RSS is relatively unpopular.
Delicious and related services never generated the sort of social proof / payoff that drove other services. E.g. desire for friends / followers / karma were essential to FB / twitter / HN (since we are here!). Delicious was high on the personal utility, low on the social reward.
I'm not sure this is that related to Delicious' functionality, but might just be a cultural / community function, that never really developed in this case. It's not tech that makes HN awesome, it's people. But given that Digg / Slashdot faded, this may not be as popular a category. Reddit is huge now... but it's more of a forum vs. link sharing.

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