Hi!
Not forever.
Of course not. But will they stop growing due to lack of funding, or due to the fact that the goals have been met and everyone in the world has access to the sum of all knowledge?
I wasn't telling "wikipedia will stop growing". It was more about the word "exponentially" that everybody is happy to attach to the debate. There're limiting factors, such as "everyone in the world", "all knowledge", "enough funding", etc, which are quite philosophical and outside the scope of this list.
Anyway, as for distributed content hosting ideas, we haven't been ignoring them all that time. Though, we had to test and reject quite a few of them.
Very interesting example is Joost (http://www.wired.com/wired/archive/ 15.02/trouble.html) - the article explains about distributed media storage in popular terms, but in summary, they still have to handle all the long tail content on their storage environment, and p2p wins are mostly for the very fresh and very popular (and huge) content. Their system is being built on most mature p2p platform out there, and still does not seem to solve everything. And yes, they need a special client.
As for image (or any other) hosting - WMF would have completely no power over privacy policy then - unless whole world agreed to turn off Referer [sic] request headers. Of course, that aside, there're quite some other issues with efficiency, and it is mostly about 'reducing costs' rather than 'improving user experience'.
It would be much easier just to have someone donate few gigabits of IP transit ;-)