Some extensions, do use image upload.
To avoid flaws in the moderation system it would be great to have an image upload system on Twitch.

The streamer or developer could upload an image, that will be reviewed by Twitch, like emotes or cheermotes, etc. Once the image is approved, it can be used in the extension on the streamer's channel.

This will allow streamer to have more personnalisation options in extension, without adding multiple image upload system for each extensions that doesn't go through the twitch moderation system.