There are a couple of reason to host on 3rd party sites
CDN - low latency
Horizontal scaling - One single server won't be enough to hold all images
On the go optimization - You don't have to optimize images
Less load to your server
For my product, our servers output is 99% json. Rest is handled by 3rd party services like these. We use Cloudinary, Netlify, Google Cloud Storage, Google CDN, etc