With Photon, doesn’t that mean all your images are stored at wordpress.com instead of in your local media?
No. Photon caches the images and makes them faster. Your images are still stored on your site and If you turn off Photon, it will just go back to using those instead. Super simple.
I would worry that that reduces the portability of my site. Not a real worry?
Nope, you shouldn’t worry about that at all.
+1, same problems here. Why is post by email still such a problem anyways?
Post by Email is actually not an easy feat. As a matter of fact, the implementation by WordPress.com is pretty awesome. Bugs happen too, and we are around to work on them and fix them when they do. Posting relevant information and details about whatever issue you’ve run into is really the only way to help with that process.
Regarding the image sizes, I’m not sure what’s happening yet, but I will look into it and report back here as soon as I have more information.