The competitors never really pulled much of the traffic; what really pressured them to drop the beta was that the comment section became a complete wasteland with huge amounts of anti-beta spam and moderators playing along by modding down on-topic posts and modding up the anti-beta posts. One of the editors took to moderating everything critical of the beta down, but found that they couldn't keep up against the prevailing opinion.
The other time something similar happened was when SourceForge (part of Dice, same parent company as Slashdot) started bundling malware with the GIMP, and the /. editors refused to post anything about it. Again there was a revolt in the comment section until they finally relented and allowed a post about it.
Definitely some parallels to the reddit situation, although I don't know that the reddit userbase can come close to working together like that.