Right, but why not just pay imgur some $$$ for the privilege of a simple little upload form? That seems like a far smarter idea. Now Reddit is responsible for running not only its current business but also an entirely separate image hosting business. Keep in mind how ridiculously expensive it is to run an image host. Even imgur, which is by far the most acceptable of the popular hosts, has a ton of obtrusive ads.

I have a feeling that this image upload thing was dreamed up by an intern who thought "oh, this would improve our user flow!" while not realizing it might literally double the company's costs in exchange for a gain of a few percentage points more users.

Reddit can't run obtrusive ads (they'd piss off their user base) so where is that money going to come from?

Example reddit url: https://i.redd.it/2n0gpcrfes4z.jpg

Example imgur url: http://i.imgur.com/ykbUTZG.jpg (and that can even be shortened to http://imgur.com/ykbUTZG)