Why would they? What assets does Twitpic have that Twitter wants? They built a "better" service on their own. They don't need the brand Twitpic. What's left?
thousands/millions of images form twitter users that could be converted seemlessly in to twitter's in house solution providing a good user experience for their users preventing the breakage of the site and creating a PR problem for them...
That's true. I imagined more on the lines of a talent acquisition.