can you give me a bit more info on "can't"? Did you try drag & drop or toolbar? what file type have you tried? We have a filter on content type in the editor, so only things read with content type image/* are inserted.

Perhaps this is too strict?

re "code" button, this would be trivial to implement but doesn't really belong in the widget. Just get the html out using jquery (it's your element) and show that instead of the element by passing through a formatter (or just jquery.text())