Just for anyone following this, there's a ticket in Gemini about it here: http://support.dotnetnuke.com/issue/ViewIssue.aspx?id=6947&PROJID=29
There are one or two additional points in there. In particular there is the problem that one can no longer simply provide module edit rights to anyone and let them create their own blog, as the module was designed to do. An admin would have to intervene after blog creation and prior to the first post in order to create a role plus a folder and apply permissions in the file manager for each new blogger.
Another point is that there is no upgrade path for the workflow.. how do people find their old files.. which posts do they belong to.. how does the admin know which of the hundereds of existing blog folders to assign to which user.. and not to mention the drama of creating roles for every single blogger in order to assign individual rights in the fist place.
Another point is that all other modules that provide any content management value to a multi-user portal also provide image and/or file upload tools. See the gallery, the repository and many others. If that functionality is removed from the blog then are the other modules also at risk?
Another is that other module developers go out of their way to provide this very functionality, not remove it. Scott is adding it to News Articles this month. Active Forums has a great advantage over the core forums precisely because it manages files and images uploaded with forum posts. The core forum here only provides FCK, and obvioiusly it is disabled - because it simply would not work. That's the case with the blog - it will not work for more than one or two users.
Ask Hans Peter why he those upload buttons in there.. he didnt' put them in for nothing. He put them there for a specific purpose that is not in any way provided by the core framework. Even if it will one day be part of the core, one simply cannot justify removing this right now. The core would have to add some sort of file, user and data relationship management code as a provider to be used by any module. If this is on the cards then that's fantastic, but it simply isn't there now.
Sorry for another long rant, but please don't let this go ahead.
Rob