Using the "thumbnail option" requires you to upload the picture to BF instead of linking from another location. You say no need to be larger than 500 pixels, but to me 500 pixels looks like a postage stamp. The complainers can use tools to auto-resize images.
And posters can easily link to a larger image and not cause side scrolling. You don't need to upload to BF for a thumbnail. If a larger picture is required, they can use thumbnails from photobucket, imageshack or a link. No problem there. If you have problems with small images, you can resize the image also.
Why are you so against a link to larger images? I don't know of anyone that likes to side scroll through a thread so that it can be read.