Though imageshack's biggest crime was delete everything (maybe except stuff from paid accounts) at one point in time.
And I still stand by my earlier statement: Imgur has declined, but they have not yet stooped to the level of end-user abuse shack did. (Granted, hijacking direct image URLs is sleezy as hell.)
Imageshack made even uploads a chore. Sure, picking the image from your drive was easy - but then they made every attempt possible to force their inline branding into all inbound links.
Getting a hot-linkable image from shack uploads required extra effort. And they tried to trick you into using their quality-degraded downscaled versions everywhere. It was dreadful. I even remember couple of cases where after the upload there was no way of getting the image link out. At all. All you got was a 80x80 thumbnail and a link to their shitty pages where you could, MAYBE, view the image. (Which was, of course, downscaled and further compressed. The original was gone.)
So no, as far as I am concerned, Imgur has not yet reached the imageshack abusement park level.
It looks to me as if all recent changes work towards the goal of making reddit a mainstream site platable to the average customer who does not know or care about adblock and innovative marketing techniques.
RES is for the power user who does not generate any revenue.
It won't be very long before we need a new reddit for power users where we can move on to with our guns, cocaine and hookers.
I'd be more concerned about copyright. Most of the stuff posted on reddit already violates copyright to some degree (e.g. /r/gifs which is entirely people reuploading segments of youtube videos without the consent of the creators.)
Additionally, having to upload images to a different website which isn't linked from anywhere on reddit, needing an entirely different account to manage them, is just confusing. Reddit isn't really a pure link-sharing website, and original/remixed content is important to its users - so managing that should probably be something integrated into the site.