Yeah I noticed that last week and I'm probably going to switch to Pixlr soon.
You should be able to switch to Pixlr your self by changing these in your local settings:
IMG_EXTENSIONS = ('.jpg', '.jpeg', '.png', '.bmp', '.pxd')
IMG_EDITOR_READ = 'imageurl'
IMG_EDITOR_API_KEY = '********'
IMG_EDITOR_METHOD = 'client'
IMG_EDITOR_PORT = 8001
I haven't tried the Pixlr API in a while so I don't know if it will work.