To answer your question about why they would do this: the image is uploaded and stored once but every time someone reads your post, the image gets downloaded to the person's browser. The bandwidth or data transfer costs become massive. You also end up with truly slowly loading pages once people starting filling posts with multiple massive image files. Some posts would not load at all. I found that while browsing steemit, my data costs were going through the roof and I am just one user. This is a massive saving that also leads to better site performance.
As a a website builder, images 101 is: compress your images and I have always resized my images to around 650px anyway. If you do this yourself, your small images will look ok and you could try hosting larger versions elsewhere and linking to them elsewhere if you felt truly altruistic and confident that people will actually click on your larger images