Where to host images: with WordPress site or externally?

When I originally started my site up I was keen to reduce the bandwidth and storage space needed on my servers so I used sites like Photobucket for image hosting, and had images hosted from there. I was wondering if that’s still a best practice, or should I be keeping everything centralized on one server? Bandwidth and storage isn’t really an issue now, but is using a CDN like Photobucket for image storage the best thing to do?

My site’s not that popular so I never reach my Photobucket quota limits. What does everyone think? Keep everything close or spread the love?