According to the article on Programmable Web, and confirmed via a blog post on TwitPic, TwitPic is shutting down because of legal threats over trademark infringement!
TwitPic is where I originally started sharing pictures on Twitter, until Twitter started hosting media themselves and didn’t allow you to choose your host in the app any more. Around the same time TwitPic started compressing images, Instagram rose to prominence, and I started using Aviary and Flickr to tweet images (I now use WordPress for everything).
The key take away from all this is that as a third-party that relies on the benevolence of an ecosystem’s master you are always at the mercy of their whims.
Schultzter 