I don't think this is true.
First, I would like to point out that although Diamond may be the founder, chief architect, and dare I say "publisher" of SkepticWiki, that does not mean that the articles published will reflect his biases. In fact, I certainly hope that they don't. There are a number of other people on-board his project, Your Little Droog being among them -- and as far as I tell, Diamond takes his responsibility to fact-check other people's articles as seriously as tjhey take their responsibility to fact-check his. This aspect of mutual checking by a panel is one of the important aspects of the peer-review system, in that there is an implicit check on the whims and biases of the overall editor.
I don't think bias on the part of the editor-in-chief necessarily damns a publication, and in fact I would go further and claim that such bias is unavoidable. Editors-in-chief are just as human as the rest of us. What can be avoided is letting this bias dominate in the work. You've shown no evidence that Diamond's biases as an individual are reflected in the work produced by Diamond as an editor-in-chief.
Now this is a cogent argument, and was what I was trying to get Diamond to say: first, either that s/he is biased and has perhaps not reviewed all the facts, or that s/he has evidence to support hir claims; second, that no matter what those beliefs may be, they would not affect SkepticWiki. However, the fact is, s/he has NOT said so. And having had dirt dumped in my mouth twice once upon a time, I'd say that a healthy aversion to having it happen again is a reasonable response.
Second, I don't see why or how the issue of "conflict of interest" enters into it. SkepticWiki isn't competing with Wikipedia (and Diamond would be a fool to think it could). SkepticWiki was founded in large part because Diamond was concerned about the accuracy of articles in Wikipedia (and specifically that some aspects of Wikipedia prevented the presentation of critical analysis from a skeptical, fact- and evidence-based point of view). If anything, I would say that this discussion only strengthens the validity of his concerns.
The fact is that s/he has made infamous, if not libelous or slanderous, accusations against an
entire scientific discipline and refused to answer when challenged to provide evidence or retract the claim. (Whether they are libel or slander depends upon their truth, and although I do not BELIEVE there is such evidence, that does not mean that there in fact is not. Whether such conduct (deliberate concealment of results and methodology) would be infamous is not in dispute, I think.) I fail to see the difference between this and the situation being discussed about Wikipedia, with one exception: when challenged, the individual backed down from the claim (not that I think Diamond should, unless s/he cannot produce supporting evidence; but SOME response is, I think, when making such an accusation, reasonable to expect).
Have you ever heard the phrase, "not merely propriety, but the appearance of propriety?" I have no means to judge whether this resource is likely to be reliable but to review it, and to examine the character (insofar as it is possible to do so) of the contributors to it. When I find a red flag raised in regard to the presumably chief contributor, I find myself asking whether reviewing it is a waste of time, and that is not a good question to be asking before I devote a bunch of time and effort to it.
In regard to the conflict of interest, it is not necessary that Diamond be attempting to replace Wikipedia; if the goal is merely to supplement perceived lacks in it, which according to this discussion are the result of slanderous or libelous statements in it, then the practice of making statements oneself which in the absence of credible evidence appear to be libelous or slanderous does not lend credence to the idea that one's efforts to correct the situation are likely to be any better. If, on the other hand, the goal is to engage in critical and skeptical analysis, then the practice of making such statements is added to the practice of not responding when challenged on them, which obviates any possibility for analysis of any kind. The effort can easily be compromised by this problem, and I have at this point nothing but your word (which I do not question, but which is not the word of the principal) to oppose to my perceptions in this instance, and you'll pardon me if I don't think that sufficient; the main lack, IMO, is the word of the principal, which s/he has refused to give, rather than any deficiency on your part. I don't know of anyone who refuses to give their word on such a matter unless they know they could not keep it.