In all honesty, the 1 megabyte is a relatively small feature of the Free Plan. That's only enough storage for 10-12 or so images.
We provide it for Free plan users because sometimes Free Plan users will try out creating 'test listings' using our lister page and this is enough storage to hold a few images for that purpose. Also, we occasionally have users who are on the $2.95 plan who want to stop listing temporarily. When those user temporarility downscale to the Free Plan, the 1 megabyte hosting allowance is enough so that they can 'tuck away' a small number images for free until they start listing again.
In answer to your second question, since the Free Plan does not include listing service, you cannot supersize the images. However, if you would care to upgrade to the Basic Plan you will have 500 MB of image hosting (enough for around 5000 average size images), you can list up to 15 ads per month, and you can supersize your images--all for only $2.95/month.
Hope this helps.
