Well, the problem with allowing people to embed external images is of course that it risks them being broken, or replaced by porn ads after the free webspace expires and stuff like that

Hm, that I can actually see as a good reason... considering their general stance it makes sense.

As long as I can post my comics, I don't really mind hosting my images offsite like I do now with AO3... I'll always need a space to host art anyway, and LJ's scrapbook is not that bad for that. If AO3 has trouble with the amount of content and traffic they got now, I think hosting images is way off in the future, if it's feasible at all... I dunno.