Another issue is that image storage is a huge resource burden, to the point where instance admins will simply purge images periodically to keep their database at a reasonable size. It seems like every time I look at Lemmy posts older than a couple months, the images are broken.
I'm not convinced image support should be built into Lemmy in the first place. Back on Reddit, people relied on external image hosts like imgur for many years, and those worked a lot better than the image system Reddit eventually built in (which is covered in wall-to-wall anti-features like the inability to load a goddamn image directly).