The revenue on advertisements would be 10x (from what I recall) of what I spend on the hardware.

The trick is to approach the problem smartly via bandwidth control techniques (ip rate limiting, proper bandwidth queues via ipfilter, etc) and identify abuse early.

In 2014, their margins would be (again my opinion) double of what mine where.

Hardware is cheaper, bandwidth is cheaper and you have easier access to really fast and complex caching solutions.

I didn't know that Reddit had invested money in the company either, that could potentially be a pretty big boon for them.

Realistically, bandwidth is relatively cheap and the type of advertising they show on Imgur is likely pretty expensive. Anything to do with home buying (what I've been seeing lately) is usually pretty expensive CPC-wise.