[silkstone]

If you bounce the flash straight up with no diffuser, there is no light going directly from the flashgun to the subject - hence no shadow.

With a diffuser fitted, some light will go straight from the gun to the subject through the sides of the diffuser, so you'll still get a shadow.

The diffuser doesn't really solve the 'point light source' problem completely. It spreads the light around more, but you're still getting some direct light on the subject.