One problem I have with the image proxy is how it breaks images without an extension. If an image is served with the right MIME type, such as image/png, it should be proxied even if it has no extension or the wrong extension. Extensions are a very bad way to describe file types over the Internet. MIME types exist for a reason...

This bug breaks useful services such as Google Docs's chart API, which provides the easiest means to include LATEX in posts.