Earlier it was mentioned that there is no such thing as a free lunch. To go with that is the saw that "If you are not paying for a product, you ARE the product."
If Photobucket have discovered that hosting free photos for other websites is costing them money, they will look to reshape their operation. Which they have done.
On other threads keeping your own backup has been thoroughly discussed, and my thinking is totally with the school that says that entrusting somebody else, whether paying them or not, to look after your data is just asking for trouble. It matters not a scrap how solid or watertight a contract is, if the company goes out, its stored data goes with it. Or if a government agency says that the company has been upsetting that government, all of the data stored can be impounded. There was a lot of legal and legitimate data stored by honest people hoovered up when "they" went after Kim Dotcom a very few years ago.
One thing is fairly certain, Photobucket, by the way that they have implemented the change, will probably never be trusted again, whether for a fully paid for service or not.