It's not strictly true that the law allows a certain percentage, or a certain number of words, to be reproduced. Rather, the fair use (or "fair dealing") provision allows limited extracts of a work to be copied for the purposes of review or research, provided it does not have an adverse effect on the potential market or value of the original work. (The details vary from country to country, but the above applies in the US and elsewhere.)
It is that provision that Digg, etc., will be relying on. If it came to court, they could argue that their actions are not taking business away from the original publisher, and so the publisher would have no case against them.