Yes, because it's so much easier than going to a hosting site, then having to enter a dang code to weed out the bots then randomly at times your photo is no longer hosted. Plus, it's helpful having them on the product page for others to look at.
I do with certain reviews if I feel it will add to or enhance the review. Usually this pertains to my lingerie reviews, but if there is something that really needs to stand out I will add one for a basic review.
No because there's no way to view them like you can if you host them yourself. Like, I can't go to one main page and see all my pictures if I want to reference them for something else. So I upload them all to my own site and link to them here.