Such is the lifecycle of an image host. People want simple, free image hosts. So, the demand is always there. And every new simple, free image host eventually has to make money, so it becomes an ad-ridden mess. Imgur was once super simple and became the de-facto image host for Reddit overnight. It's competition back then was Imagebucket and the like. Now, it IS Imagebucket. And so we have a new challenger. (Well, Reddit has it's own image hosting - sometimes! It's limited to some clients and some subreddits, at the discretion of the mods I believe.)
(I actually got fed up that I couldn't easily upload an image to Imgur from the command line and hotlink it, so I made IMGZ, then I figured others might want to use it and made a user system; I don't really mean it as a contender, though I'd be very happy if it got lots of satisfied users)
