From my understanding, the cloud they use is Microsoft's. If that's the case, Microsoft isn't hurting for storage space...
Cloud storage tends to be fairly cheap if you look into it. Plus, any good design would dictate that the picture is loaded on demand, so it's sitting there dormant until you actually navigate to the page that it's on.
I would hazard a guess that actually transmitting the photos from a hardware device to the cloud is immensely more strenuous than having the images sit in storage for prolonged periods of time.
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