If Diego faced Matt I believe that Matt would win. I dont think Diego could keep the fight standing. Matt's standup is not as bad as everybody thinks. He does not have KO power however in recent times only 1 person has KO him, and he has fought great talent.
I dont think Diego is ready to break into the top of the WW devision but he is knocking on the door, we will see when the UFC actually give Diego a desent match.