You were doing this from a browser and not an app? Some mobile browsers disable the file upload dialog, and there's nothing the site can do to get around it. I know it works like this on iPhone (and it's a huge pain in the ass; you'd think they'd AT LEAST tie in the camera to let you upload photos), but I'm not sure about Android. Are you able to upload files on other sites? Again, I don't have an Android device here, so I'm asking, not telling.
I was specifically using the full site because the Android FB app, on 2.1 anyway, is pretty limited as to what it can do. I'm still eagerly awaiting an update to 2.2 from Samsung for my Captivate that will supposedly happen before the end of this month. I'm not holding my breath.
