Interesting that newer TinyMCE releases have this capability built-in -- I wasn't aware of that.
I think two solutions might be necessary: one that allows users to upload arbitrary images e.g. as part of their biographies (though to be honest I'm not sure this feature is worth the risk of having people post something nasty), and another that allows journal insiders to post less controlled content (e.g. not just size-limited images but also PDFs and the like). The former could be satisfied by the TinyMCE uploader you linked, and the second could be satisfied by something like you describe in the Publisher Library.
If the Publisher Library solution would satisfy your needs, I'd prefer leaving the arbitrary image upload thing until we could talk to someone who had a concrete use case; that way we could talk limits with something specific in mind. I think all the Publisher Library would require is a checkbox that would allow public access to a file there.
Public Knowledge Project Team