That was always ironic to me; it was designed to be "Reddit's image host" but slowly became some weird mashup of Reddit and Pinterest.
I'm a little surprised Reddit didn't buy them after the former started picking up traction and investor money; IMO introducing their own image host years earlier would have been a home run.
I expect due to the influx of VC money into Imgur their asking price was too much. And setting up image hosting in your own backend (which will all be proxied from S3 anyways) isn't the hardest thing to do.
It's what I always told everyone who jumped from ImageShack to Imgur. It was clean and lean back then, but it was obvious that one day it would turn into the next ImageShack. It happens with every. single. free. service. Or it just shuts down before it happens.
How do you pay for bandwidth if your main objective is letting people link to .jpg/.pngs directly? Either you force people to make accounts and pay once their images exceed some threshold (photobucket/imageshack) or try to force them into ad-included html pages (imgur).. I don't see any other way around it.
Of course. That's why no one should be surprised when it eventually goes downhill. I'm gladly hosting my images myself but I know this is not an option for everyone. But sadly many people are riding on the free wave who wouldn't have to, and those are then the ones who are usually the loudest when the quality drops.
I'm a little surprised Reddit didn't buy them after the former started picking up traction and investor money; IMO introducing their own image host years earlier would have been a home run.