Jimmy-
If someone says "Gee, I'd like to be able to read an article about the Nick Berg situation without having to look at the actual picture unless I choose to do so" then responding with: "Fine, you may turn off every single image in Wikipedia"
??? That's not the proposal. I think you misunderstood what has been discussed. See http://scireview.de/wikipedia/ihide/ (tested in Mozilla).
You would have a link to dynamically hide images *on that particular page*. To prevent people from viewing the image before they choose to hide it, the offensive image would be moved out of immediate view, perhaps to the bottom of the page. (It would be required by policy that adding such images is only allowed when the page is long enough to do that.)
There would be a user preference to hide images on such pages (those with a <warning> tag) by default to avoid all risk of stumbling across one by accident. That should not be the default, however, because then we would implicitly endorse the majority POV -- instead we endorse no POV, make only neutral statements about the offensiveness of images, and offer people the choice to tell the server "Please endorse my POV on this image", by clicking the hide link.
Last but not least, when there is clear consensus on the matter, images could still be moved to a separate page.
Regards,
Erik