When you ask a question on SO, you can add images. One of the options for adding images is to add them based on a URL. SO wouldn't be able to just accept any URL for an image, however.
For instance, if someone created a site that required basic http authentication in order to serve up the image, then they used that image's URL in their SO question, everyone who navigated to that question in their browser would be presented with a username/password dialog, presenting a security risk to SO users.
That being said, I'm curious as to how SO handles URL-based images in questions. The site must proxy these images somehow, right?
To help clarify, let's say a hacker sets up a little server which requires basic authentication. Then, when creating a question, or posting an answer, he adds an image from a URL, and for the image URL he enters a URL that points to his little server, such as: "http://myhackingserver.com/someimage.jpg". In this scenario, if the site just rendered
<img src="http://myhackingserver.com/someimage.jpg" /> onto the page, any user viewing the page would be presented with a username/password dialog. It's a phishing-style attack.