Isn't image hosting a horribly crowded space, completely filled with big hitters? It seems like they just weren't close to competing in scale with the likes of flickr, imgur, or instagram. It just seems like there isn't room for another small image host unless they're showing serious potential to be one of the big ones. Instead of being an image host, they could have stayed leaner by being a hub for other image services, but that also would probably be less interesting to investors because they'd just be latching off other image spaces.