This hurts vendors the most (customers can just move elsewhere to showcase their art, such as Daz, ShareCG, or Deviantart)

1. Vendors sometimes post additional promo images in the gallery.
2. Vendors use the gallery as advertising, esp. for WIPs.
3. When a customer posts a render that uses one of their products, it's basically like no-effort advertising.

512x512 is a ridiculous limit. Most gallery sites have a reasonable image size + file size limit-- usually 1500x1500 at the very least.