“If you are not paying for it, you’re not the customer; you’re the product being sold.”
Letting another company figure out how to make money with your product does sound odd, particularly when the product is the users and not some kind of resource.
But another fact is that if you give someone something for free for a while and then you start to charge for it (or add ads to it) they are going to be upset, regardless of whether they "should" be upset. No one is happy about the experience of having value subtracted.
You can use of the myriad if other apps, like Flickr which stores the images at a decent resolution (instead if the 612x612)