The major problem with displaying images uploaded by the user is their size. If a user uploads a 6MB image there may be resource problems trying to process it for use in the PDF. And if a user uploads more than one 6MB image you can guarantee the PDF will take a significant amount of time to generate, or won’t generate at all. It’s why we haven’t added native support for this yet.
We currently recommend the Slim Image Cropper for Gravity Forms plugin, which resizes the images in your browser before uploading them to the server. Just make sure to set the maximum image size to 1000,1000 to prevent the aforementioned image size issue.