Hosting an image site means you're responsible for its content. That means you need to have some policy for dealing with all the copyright infringement, child porn, racial hatred, leaked celebrity nudes, shock images, etc. It's a potential lightning rod for brand damage.

Note that all of Facebook, Google, Microsoft, & Amazon already allow you to host your own photos but aren't used in this way.

(Everyone has more or less given up on copyright enforcement for images, possibly because there's no central enforcement mafia, but that doesn't mean it's not still the law)