Bradtri, you're most likely going to find differing opinions on this, but I believe that the diffuser should be larger than the stone, and, if it isn't, there's a greater propensity for the edges of the stone to get quite a lot hotter than the center.
If there's not enough space to expand the diameter of the diffuser, you can also prevent hot edges by using a diffuser that runs up and above the stone. This is the principle under which commercial deck ovens work under. Think of the stone sitting in a pan, but not directly touching any part of the pan.
Another factor that can lead to burned rims is the manner in which the pizza is stretched. With a thick rim that goes to a thin undercrust with very little taper, the rim will puff up and lift the area around it off the stone. This is one of the advantages of stretching out a thinner rim.