Hi Kimberly, thanks so much for replying to this feature request. Your plugin is most excellent!
Pinterest does not only create a thumbnail based on links. They use the full images but resize them to their deign needs of 554px max width. All you have to do is go to Pinterest and click view image to see that the actual image is indeed hosted on their server - this is way beyond a thumbnail.
Moving forward, could you guys possibly add a feature to generate a 554px thumbnail based on image data from the links that would be stored on the local server the same way Pinterest does? It seems that this would follow your suggested terms of etiquette and would still make it easier for users rather than having to upload each image.
(Note: Pinterest was not mis-characterized here. In the Quora link you provided, the Pinterest engineer said it herself: "A pin image can either be uploaded or scraped from a URL. Once we have the image data, we use PIL to generate the thumbnails." And to further prove this, pin something from WPMUDEV and then delete the original image. It will still remain on Pinterest and not be deleted there because it has been scraped.)
(Note: This feature does not promote improper scraping. For example, Buddypress users that are active on Instagram would use it to share their own Instagram images on the Buddypress site. This is well within their right. Or for sharing creative commons images, also well within users' rights. Yet, when depending solely on linking, it is bad for the Buddypress site because if any of the linked sites are having connection errors, then the linked images would not work.)
(Note: Also, it is regarded as equally bad etiquette to hotlink images from other sites effectively stealing bandwith. Yet, even with the very valid arguments, it's clear that you are the God of Activity Plus and will deny this request perhaps out of spite because of this discussion. Thanks anyways for the consideration.)
PS-you were not misquoted anywhere in this thread =)