Edit: So to put my money where my mouth is - Right now storage is costing me around $150AUD a month - so if somebody can build a media server we can share/deploy and offer it for all of the Fediverse instances... I will give them a minimum of $3600AUD [...]
Did you even read the article? It’s not like all the users just get unrestricted access to storage to treat like a google drive, this is a backend thing. This guy is trying to find a solution to all the wasted bandwidth and storage space from sending copies to all the other instances they’re federated with, which is a legimate issue that the instance admins are already dealing with on a daily basis. This will let them pool resources to help lower costs for smaller instances.
As to the CSAM thing I can only imagine it would be easier for one instance to purge fifty images/restore from a backup and everyone else just have to redo their thumbnails as opposed to all the instances having to purge and restore but that’s just me.