Being released under Common Public Attribution License, reddit is now allowing users to download the full code that powers its website. The real intent is to have developers provide improvements for reddit itself, making it a bigger and more powerful platform that only their small team of 5 can not possibly manage.
There are more Digg-like open sourced platforms for you to choose, such as Pligg. So, the real threat of someone building a strong competitor for them is weak. The community is what powers these sites, not technology. So, by opening their code they are trying to engage the community more and allow the possibility for faster development time.
In summon, by no means an altruistic approach but an action that is nevertheless applauded since now they at least reassure users that their algorithm is clean and fair.