For me, uploading a photo for one of my blogs is easy. That's because I understand some HTML. But for others that use WordPress and don't know any HTML, it seems an impossible task.
One might be able to figure out how to upload the photo and then insert the link into the blog. Other than that, you need to know HTML to make the photo display right unless you want a photo at the end of your blog that is 7 million pixels wide.
I have found that it looks much more professional by adding a bit extra HTML to the img tag that is inserted into the blog. First, place the img tag at the very beginning of the blog. Then you could add inside the img tag a simple "align='left'" or "align='right'". With that, add onto the img tag a style="margin: 5px" to pad the image and also a border="1". This next addition I think is probably the simplest way to make a thumbnail on the fly with a user who knows no HTML. Just add width="200". That'll at least size it down to fit in the blog and look nice, but also make the whole image a link that will pop-up the whole original photo in a pop-up window for them to view.
This should automatically be inserted when any image is uploaded to be used with the blog. Then the user doesn't need to know to add the img tag into the blog and what-not.
Now, I know for the rest of us who have quite a lot of experience in creating web pages, we alone could do alot better job. But I think if we make it easy for users to add a photo into one of their posts, it'll make using WordPress alot more enjoyable.
Then once that is implemented, you could even take it further by adding more photos to one post and just displaying those thumbnails at the bottom of the post.
Blogs are great because we can say what we want. But most people would rather let a photo tell the story.