Social news website Digg is getting rid of the controversial DiggBar as soon as the upcoming version of Digg exits beta, acting CEO Kevin Rose announced in a blog post today. All previously banned domains will also be unbanned when the new Digg launches, Rose said.

DiggBar is an iFrame toolbar that sits on top of a web page (see below). It allows users to digg and bury pages, view comments and page views, and discover other stories without having to return to Digg's website. Additionally, users can create shortened Digg URLs to share on other social sites by typing digg.com/ before the URL of any given page.

Although it seems like a useful tool, DiggBar's release was controversial, primarily because its URL shortener was accused of hurting website's search rankings. Many sites and users blocked the DiggBar as a consequence.

Digg defended the toolbar, assuring publishers and users that it did not negatively impact SEO. Digg caved to some requests, however, removing the toolbar for users who are not logged into Digg and allowing logged in users to opt out of the feature.

Today, Rose acknowledged that the DiggBar is "bad for the Internet" and added that "it causes confusion when bookmarking, breaks w/iFrame busters, and has no ability to communicate with the lower frame (if you browse away from a story, the old digg count still persists). It’s an inconsistent/wonky user experience, and I’m happy to say we are killing it when we launch the new Digg." It's a major concession given Digg's defense of the toolbar a year ago.

The decision follows yesterday's surprise announcement that Jay Adelson is out as CEO at the social news site, which came as a surprise given that Digg has recently ramped up hiring and is about to release a complete overhaul of its site. It's uncertain how much of today's promised changes have to do with Adelson's departure.

What do you think of Digg's decision to remove the DiggBar? Will you miss it? Let us know in the comments.