I agree with you on this point. However, I also believe there is value
in HTML defining a limited set of supported data formats for embedded
image delivery. It is unreasonable to require a user to setup lots of
converters just to read a few documents. Oh, this server uses TIFF, this
server uses JPEG, this server uses... By supporing a single format every
browser that supports <IMG> works correctly, that is a big deal. You start
adding in new types and users will start finding documents they cannot
read.
--sanders