Same thing happens every time. They offer a free service, it gains popularity, becomes the de facto host, costs increase, they gain few paying customers (or other revenue sources), they try to add value in various ways, it doesn't work, they go bust, someone says "hey, it only takes a weekend to throw together an image host. I could do that...", and the cycle begins again.
Read the article, and in particular, either the last line or the footnote. So very true.