The main problem at its core was that ImageShack was made for profit - while Imgur was bootstrapping as much as it could. Its not like those free services cant exist bootstrapping - its that founders need to do really good job saving money everywhere they can, avoiding profit and having some money in the bank account so whatever happens they wont panic.
Sometimes when you see today start-up culture it seems like some people are not serious. Spending loadz of money on some unimportant services, parties, meetings, hotels etc. Its not like servers these days are crazy expensive - any startup could easily grown on Amazon/Softlayer with backup server from OVH. It wont ruin your budget as long as you commit yourself to spend money on what's important for 1-2 years until you get some funding or ads going on.
