1. It takes up too much space and it gets messy because people post like 40 pics in their sigs and it's hard to find where actual posts are among all the ******** that you don't even want to see. Forums that have those are almost always annoying to browse.
2. You can't actually put a limit on the horizontal size (as far as I know) since it's just part of the signature, and that could create the horizontal scrollbar issue (which is obnoxious). We already have a vertical limit on the size of the signatures anyway so your images would probably get cut off. The vertical limit is necessary as well because we used to have people with extremely long signatures that - once again - made it annoying to browse.
3. Nobody cares about your images but you. Fact. Sure they're impressive sometimes. But sadly, once we see it the first time, we're over it; we don't need to see it every time you post. If you want to show off images,
we have a forum for that already.