As of this writing, flickr has switching things around. Now everyone gets a free terabyte of storage for their photos. Conservatively, this means that everyone can store 100,000 high resolution images in their flickr account (assuming I have done the math right). Somehow, this is seen as a good thing. 100,000 images is just about as useful as 0. 10,000 images is similarly useless.
People who have not thought it through think that the digital photography problem is simply reliably storing all the pictures. This is not in fact the problem. The problem is the same as the backup/restore problem - it's the restore that's tricky, it's the restore that must work. Similarly, storing pictures is easy, it's getting them back and looking at them that is hard.
The predominant model for online picture storage is chronological. 1000 pictures, 10000, 100000, all turn into the same thing: the most recent 30 or 40 pictures. Sure, you can click back in time, but you don't as a general rule. Even when you do, you go back a couple hundred pictures and then start dipping in randomly for another few dozen and then you quit.
The problem is not one of storage, it is of curation. Or, more bluntly, the digital photography problem is a problem of throwing things away.
So, here's the business idea: 50pictures.com or similar. Users can store up to, say, 200 images. They can organize and sort and fuss around with their portfolio. However, they cannot show to the world more than 50. You have to select the 50 for display, and once you hit the limit, you have to deselect one before you can put another one up. You can only select 5 pictures a day for display, so no slideshows.