That's a pretty simple solution: if some service inevitably deteriorates in quality when run for a profit, then run it as a non-profit! I mean, isn't that how imgur actually started? The Reddit team wanted a decent image hosting so they made it and just accepted that running it would cost them money so they'll have to finance it from the profits of their main business. But then apparently profit-optimization kicked in...

There are quite a lot of examples in the past (all the way to the Roman empire) of rich people spending their money on community projects just because they wanted some things to exist, not to make even more money.

Rich people and companies will typically stop doing that once the costs explode and eat all their income. Unlike governments, they can't exactly print money...

There is a huge graveyard of image hosts - it's not for lack of trying. There are all the pomf.se clones that are community supported (like catbox.moe) which don't even break even from patreon.

The problem I see is that once you get even to the scale of a 10th of size of imgur your hosting bills (storage + bandwidth) will cross into the 10s of thousands per month, which would require you to be in the top 1% of Patreon users. I don't think you'd find people lining up to donate for such a service, especially given there are so many copycats.

Well I was going off what the above parent comment was saying, that recent advances in compression + cheaper hosting should make it more viable. I don't know much about what any of those costs cause I've never run anything that needs a lot of serving costs at scale. So I'm guessing even with that it's still too expensive?

On the other hand, I think Imgur also pushed way more traffic upon itself by trying to make itself into another social media site. Like, if it just stayed an image host it probably could have stayed more niche and wouldn't have had thousands of casual internet users scrolling through images all day at work.

As a pure image hoster, you don't earn much money, and if you're any good and fast, your traffic will go up and eventually eat up any amount of donations that content creators can muster. Content creators won't chip in more as your bills rise, because all those views don't necessarily translate to sales, and eventually something will give. And if you start to charge, and your price exceeds the cost of self-hosting, content creators will leave.

Just staying niche doesn't really solve the problem? That just means any "niche" host that finds itself growing will be forced to shutdown, not much better than what is happening to imgur here.

Patreon isn't the most reliable income source either. They suspend accounts all the time because someone reports that they were able to find incest, gore, or similar content from the creator. Credit card processors won't give you time of day either. There is a concerted effort from activists to shut down all forms of payment for immoral industries, and they have been very effective at influencing credit card companies.