I don't think the pictures or videos or whatever are uploaded to the blockchain.
What's uploaded is the body of the message with text and links to those images.
I haven't really checked where the images are going, but if it's something like dtube, it would be stored on IPFS (not blockchain). https://steemit.com/dtube/@viewangle/dtube-where-are-the-videos-stored
Nevertheless, with so many people's privacy groups in the world, it's only a matter of time until some extreme case comes up. Privacy law in many countries gives you the right to delete all your information from a specific online site, so if that is not possible, some court might want to either ban or go after the witness servers to try to shut down the system.
A joint collaboration between US and Europe (think piratebay) would probably be enough to shut down most witness servers... thus exchange would be affected heavily too.
That's some very good points. Let's hope Steem will go under the radar of those who's out to posts illegal stuff.