Just read a few internet posts about Photobucket and I think many are correct that this is last ditch attempt to get revenue quickly which means that they are the verge of disappearing so I certainly wouldn't advise anyone to pay the 'ransom'
I'm searching for alternatives
I agree with your analysis and proposed course of action.
Until I get the demand for money with menaces I'll carry on using them. I only put photos on their site for the express purpose of 3rd party hosting, all my photos are safely stored elsewhere.
The ones I upload are all less than 1MB and the only place that I link to is here. So perhaps with only about half my allowed storage used I'm not yet on their horizon.
They would seem to have "shot themselves in the foot" with this $400 demand for unlimited hosting.
If they had a graduated scale with a much lesser limit for limited sharing and using files of less than 1mb I might have been convinced, but $400? No way.
