I think the problem has mostly cropped up because a lot of folks don't understand what actually happens with images and bandwidth.
Example only:
Brandon's Avatar as current:
Resized:
Displayed as avatars both the top and bottom image would display as 100x65 pixel images. The difference is that that top image is downloaded by the browser as a 505x329 pixel image and then re-sized.
There is, of course, a bandwidth cost to downloading the larger image. This slows the forum down with the extra traffic, but it also slows the browser down. The browser has to interactively resize the image. Slowing the browser down has the effect of the browser taking longer to finish loading a page and it maintains a connection to the server while it finishes. This, of course, slows the server down even further.
I've met many people that think that the image is downloaded as the right size and there is no net effect on the server, client (browser) or the bandwidth. Others have no idea what is happening behind the sceens and trust that if it works they have done it right. The true value of a thread such as this is not in pointing fingers, but in giving people a chance to see what is really happening and a chance to correct any misconceptions.
Now, Brandon thought his image was too big. It was, but for participating in this example (OK, he didn't know it ahead of time) he now has a new avatar to use.
