Earlier quoted context omitted.
My guess would be cost. I don’t think Reddit had much, if any, revenue at the time and images would likely require orders of magnitude more storage.
Isn't storage cheap? Telegram advertises as free unlimited storage.
But the biggest impediment by far were internet transport costs. I mean, they're still onerous for a lot of media-heavy sites, but it was much worse at the time. Offloading that to third parties made an incredible amount of sense.
It's actually kind of bizarre that there is an Imgur "community". I know the operation ran at a massive money-losing proposition for quite some time.