First-principles study of hydride molecule adsorption on C(001):H reveals unexpected dihydrogen bonding. It implies that H is more electronegative than C, despite that the contrary has been widely used to explain the observed diamond work function reduction due to surface hydrogenation. We resolve this paradox by showing that the replacement of loosely bonded surface pi electrons by more tightly bonded sigma electrons is the real cause for the work function reduction. An interfacial atomistic model based on the dihydrogen bonding is also proposed to explain the observed surface p-type conductivity.