Ah yes, you're refering to "the good ol' days", when images were hosted off-site and you could make your file-size as large as necessary. Some people abused this (gifs over 1meg), others didn't keep their image-links maintained (so we got a lot of "red x" dead image links) which made the site look messy. So on-site hosting was brought in with a blanket file size limit of 75k applying to both jpegs & gifs.
I think that's the official explanation, but if you want to get paranoid about it (as I do), there are other reasons for on-site hosting...
JMH was unable to punish people for updating their images during a contest (sending to back of queue).
Also, it's a crypto-fascist attempt to bully gifs out of this site.
Also, on-site hosting allowed JMH to fix the anonymous posting system that was in place, but curiously, he abandoned it altogether instead - despite his official poll which showed that a majority of members were in favour of some level of anonymity in contests.
For these reasons, JMH is currently under federal investigation by the department of gaming and racing ethics.