Image search has its challenges, but yet, it is a powerful beast on its own. For as long as there has been image search, the issues of the search engine showing the original image, as opposed to those who hotlink to those images, has been a huge issue. Why? Well, Googler, JohnMu, put a lot of time into a response on why this is the case. So I figured I share the reason, directly from the horses mouth (as they say).

JohnMu said in a Google Webmaster Help thread:

It is hard for me to add more to this explanation. It is an issue, that is for sure and publishers often don’t help. I mean, I often host my images in Flickr and then embed them here. I likely should begin hosting them here, because it would give this site more traffic, plus it would show up more often in Google News. But Flickr bears the bandwidth costs and it is just so easy, plus Flickr does send nice traffic.

Here is additional details on Google Image search that might help.

Forum discussion at Google Webmaster Help.