I chafed at the size limit also at first, being a member of boards that allow linking and large pics. However, I have come to agree with the limitations.
First, linking leads to dead links, which totally suck. Here you can go back to the beginning and each and every picture posted is still there. Wonderful!
Second, huge ass pictures that make you scroll suck too. Some people have giant monitors and forget that the rest of the world does not.
Lastly, it is very easy to get the correct size photo, simply resize your pic to 600x450, and 99.9% of the time it will be less than 128kb. If in doubt, simply right click on the photo icon and check under "properties".
All that said, I WOULD like to see the limit upped so that 800x600 was supported, say 250 kb.