The number of publishers using Blogger platform to blog is not very clear. But it is true that there are several millions.
Where Blogger images are stored?
Quit simple, if you have googled it you know that all the images that you upload on Blogger are stored as albums in Picasa Web Album.
Along with this, maximum bloggers claim that Picasa allows a space limit of 1Gb, which is true. According to this, you are not liable to upload images to your blogger blog, once you have used 1Gb.
Your uploads are not counted, when they are made by other Google services like Google+, Google Maps and Blogger. Though, you blogger uploads are there in Picasa but they are not counted.
Then, how much is the limit?
As per Google forums, all these images upload are counted against your Google Drive space, which is 5Gb (free account). 5Gb is quite a lot of space to upload images but in case you are able to fill up all of it then you can upgrade your Google Drive. Upgrades are priced at $2.49/month for 25Gb upgrade, $4.99/month for 100Gb and so on upto 16Tb priced at $799.99/month