(kiwiirc IRC client dev here) This type of thing is down to the clients to put into place and we actually do this now. Drag/drop files, pasting images directly into the client, 1GB files supported, right out of the box. Give it a try! https://kiwiirc.com/nextclient/

I believe other clients are starting to integrate this type of thing too - it's greatly needed

Yup, irccloud does media embeds and file uploads.

I'll take a look at this over the weekend thanks!

But I think this is only a problem from a UX standpoint. IRC has DCC, for instance, but it's a matter of building a client which e.g. inlines DCC "attachments" or displays images beneath messages with links. If IRC is truly "revived" there's a chance IRC clients grow or new ones emerge to keep up with "modern" IM systems, and IRC will still have more benefits than these (openness, ubiquity...)

Forcing content upon others is something I view as an anti-feature. Linking to content that they MAY choose to display (or pre-cache in selective instances) CAN be a feature.

For example, I might allow specific rooms that I know are moderated or specific individuals that I trust to push arbitrary data in to my storage. However I definitely do not want that to happen in a random room of strangers.

DCC has been broken in practice for decades due to NAT. If you use a bouncer and have workarounds for the NAT problem in place, your files will still end up on the wrong machine, and then there is the multi client distribution problem. That's a bunch of problems you need to solve beyond just showing an image "inline".

Matrix attempts to be a solution to this