I guessed it was that but asked the question to begin a dialogue.
And if I upload an image I have stolen to use as a avatar then you will be liable for breach of copywrite. OK so your TOS says that I am responsible but ytou are the host therefore you have responsibility for ensuring copywrite.
You also make it clear that I can up load as many images as I like but excessive bandwith use will result in deletion. How much is excessive: 500Kb, 1Mb, 50Mb per month? If I use it for ebay images than I could be using hundreds of images, If I know that you can arbitarily delete all those images then I will not be pleased.
My suggestion is that you make it clear the the site is not free image hosting but is intended for those without their own domain. Also give some idea of what 'excessive' means.
Abart from that, the site looks simple enough to use but I would add a bit of colour, its a bit bland at the moment.