I remember when imgur was started because there were no good image sharing sites. They were all bulky, slow and terrible. imgur came along and made sharing images easy. Now they are one of the ones they set out to fix.
It sucks, but I don't know if they had much choice. Imgur is the classic example of the "treadmill" inherent to business models like image hosting:
1. All the existing image hosting sites suck
2. Someone gets sick enough of it that they launch a new one, with all the features people want: free, direct linking, no/unobtrusive ads, etc.
3. Because this new site is so much better, everyone flicks to it. Bandwidth costs skyrocket.
4. The operators need to cover their costs, so they start adding more ads and blocking direct links. The site starts to suck. Go to step 1.
Sometimes investor dollars get involved, but it doesn't change the basic formula. This is why we've seen Photobucket -> minus -> giphy-> imgur -> gfycat, and it will continue in his vein forever. I don't think there's any way to run a site like this profitably without pissing people off sufficiently that they go elsewhere.
There is an additional components for imgur : it became more than an image sharing site, it's now a weird looking social network with a very niche community with its own rules and culture.
Imgur was originally developed 'as a gift' for reddit. As any HN commenters would tell you, your business model should never rely on external companies.
Maybe we need a more distributed model for image hosting for it to be sustainable?
I'm thinking about something like a P2P solution, IPFS-style. You could pay for upload space in two ways - either directly, the bog standard way, or with your own drive space. So for instance, you get 1GB free space for image uploads if you agree to set aside 1GB on your drive as a cache. Couple that with your own "seeding" CDNs storing all the images, and maybe this would be enough to distribute bandwidth costs across all the people who want their images hosted?
Not sure if the browsers are capable enough to pull something like this off without relying on some sort of plugin or an application.
Before imgur, there was photobucket, imageshack, whatever - they were beyond dumpy jankey messes that you truly didn't know what you were going to get when you clicked on them. There was a good chance a new window was going to open behind your current target, or that the images would be intentionally low res until you clicked into them (for more CPM's for the host).
Imgur came along and stole their bread and butter, but then they took on a bunch of VC money and had to figure out how they were going to profit. I'm not sure if they've figured it out, but their site has definitely suffered - although not nearly to the degree as the predecessors that they replaced.
