It's also more generally useful because I can host other files too, not just images.
[1] https://www.cloudflare.com/distributed-web-gateway/
[2] https://ipfs.io/
(I can imagine a server package that can modify index.html sub-resource URLs depending on current server load, preferring private, locally hosted sub-resources but willing to use 3rd party solutions like Cloudflare, too, if required by a black swan event.)
> the ideal situation in terms of simple, decentralized file hosting solution
Not sure what you mean by "decentralized" if you are in fact hosting it yourself.
> What are the downsides of this approach?
Well, for the casual person it has the obvious downside that you have to have your own VPS. Most people don't have those. Even if you do, IPFS has a couple of advantages: you can host images anonymously, and anyone anywhere in the world can "pin" the image to make sure it stays live. If you're using a server and you forget to pay DO your $5 one month, all your images go poof into the ether.
Imgur these days is slow and riddled by ads. A page show will sometimes load many times the image size in Javascript, stylesheets and images. It also doesn't allow the user to just view the raw image, going as far as redirecting requests to the raw image to a web page if you directly access the URL.
The only downside I see is that the URL is less user friendly without the IPFS toolset installed. Sounds like a pretty good idea to me.
Cloudflare as a gateway is distasteful and this won't last long, but for now at least when you click an ipfs image over cloudflare you get an image and not javascript code.
But its also the only way normal users can see the content.