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The reason for not displaying remote images directly has several reasons.
1 - The server has to have the data local to check image size & dimensions. If it was not local then the user could alter the image after the initial check.
2 - Many sites do not like people randomly hotlinking to their images
3 - The image could be removed later, and you end up with broken images.
As for bandwidth and storage, it really depends on the average avatar size. Browsers will end up caching the image and you only have < 2k members so it's not going to be any signifant amount of bandwidth.
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