Money to be made in Free hosting?

I've seen so many free image hosts/media hosts opening up recently, people are buying these things up by the bucket load on other forums. Can the profits made by selling advertisements/google ads seriously outway the large costs of bandwidth/space?

I'm just wondering, because i've considered setting up a simple image host with a few more advanced features to seperate myself from everyone else. I can imagine a large amount of resources would need to be available to cope with the demand though.