Hopefully they won't just 404 the externally hosted pics but instead replace them with one that says 'click here to view the image' and it then takes the user through to view it on the Photobucket website then there won't be any loss of potentially useful images.
But where did they pick $400 per year from? Even if there weren't free alternatives and you were willing to pay. You can still save money by getting storage with a hosting provider and then paying someone of Fiver to go through all the photos on your blog and upload them to your new hosting. You also won't have to worry about breaching the Photobucket T&Cs on things such as nudity going down that route either.