Re: Have they tried...
If they've looked at the ads that have been served up, they've supported the delivery of the pictures. It may or may not be enough to allow the company to make money off of it, but they *have* supported it. And I'd hardly call $400 a year "a little" money, particularly when the cost has always been zero in the past.
The question is one of how much bandwidth is being served up per ad view. Embedded images don't get much of a chance to display ads to the viewers; it's the uploader who sees them while using the web interface for that purpose. If he's running a business on eBay and has a lot of people viewing images hosted by PB, that could easily be costing them a considerable amount of money without any chance at a return, and I don't blame them for wanting to monetize that or put a stop to it.
On the other hand, the person who simply uses it to upload images to various web forums is probably not going to be anywhere close to the kind of bandwidth that would justify paying that much.
I've been using Photobucket for years for hosting images on various web forums that don't offer that themselves. I don't know when I created the account, but it was years and years ago (probably when I moved off of my dial-up account with its personal web space; I always used that before I used PB. That was a LONG time ago!). I would not be surprised if my PB is almost as old as the site itself. In that time, I've probably used it a dozen times to upload at most a megabyte's worth of images for posting on a low-traffic web forum, ultimately to be viewed a few dozen times. Maybe half a gigabyte total over ~10+ years. Very, very low volume stuff, and seldom used (but always the go-to when I needed it). It's been a couple of years since I used it last.
Is all of that put together worth $400, let alone ten times that? Ten years of service would have cost four thousand dollars, and that's if it was only over ten years. I think $4000 for 500MB of cumulative bandwidth is a bit much. Of course, that's probably close to the minimum anyone who embeds would use it for, but that's just the point-- who does this high price target? It's clearly not me.
For people using $400 worth of bandwidth in a year, whatever that may be, it's obviously an appropriate price. Is that the typical amount of bandwidth their embedding account holders are using, though? I would find that exceptionally difficult to believe. It would seem to make more sense to have a certain ceiling per month that will continue under the free plan, with a cost per gigabyte above and beyond that baseline.
$400 just isn't a reasonable price. That's a "we're trying to kill off any demand for this service so we can get out of the business" price. If that's the goal, I would rather have them come out and say so rather than slap a completely asinine price on it and kill demand that way.