There's just no way to do a free image hosting site without it turning to crap sooner or later. When Imgur started making it hard to copy the direct .jpg links, it was game over.
What's interesting is that Imgur managed to pivot into a full-blown community site, with threads, communities and voting. I don't think they're very dependent on Reddit anymore. From a few cursory glances, they have a relatively large amount of participation, and it's not unusual that an image shared on Reddit has a huge comment section on Imgur, with Imgur users not getting the context (that of course is over on Reddit).
Reddit is doing a smart thing here by hosting the images themselves. They're now at a scale where hosting images is feasible. Being dependent of Imgur (and Imgur not being dependent of Reddit) is a bad thing for Reddit, since most of the popular content on Reddit is images, and so Reddit gives away a huge amount of traffic to Imgur (which is basically a Reddit competitor now), trading that for the expenses of running an image hosting site. I guess Reddit realized it wasn't worth it.
What's interesting is that Imgur managed to pivot into a full-blown community site, with threads, communities and voting. I don't think they're very dependent on Reddit anymore. From a few cursory glances, they have a relatively large amount of participation, and it's not unusual that an image shared on Reddit has a huge comment section on Imgur, with Imgur users not getting the context (that of course is over on Reddit).
Reddit is doing a smart thing here by hosting the images themselves. They're now at a scale where hosting images is feasible. Being dependent of Imgur (and Imgur not being dependent of Reddit) is a bad thing for Reddit, since most of the popular content on Reddit is images, and so Reddit gives away a huge amount of traffic to Imgur (which is basically a Reddit competitor now), trading that for the expenses of running an image hosting site. I guess Reddit realized it wasn't worth it.