I think the problem with this particular web service area is that you can set up an image sharing site easily and for little cost. But when it gets popular, and there's a shift to higher bandwidth usage, then costs mount beyond the ability of most people to sustain it. If it's popular then it's going to get acquired or have investors who will push the site to be more commercial; the only other way to go is to close the site or perhaps beg for donations.

> to suck people in before you ratchet up

It's an image hosting service.

You upload cat pictures, you pass the link around. That's it.

Once the hosting service stops being a hosting service, you move on and upload the picture somewhere else.