Disclaimer: I wrote this article and made this website.
There was some talk of this issue in the recent fediverse inefficiencies thread. I’m hopeful that in the future we’ll have a decentralized solution for file hosting but for now I deeply believe that users should pay for their own file hosting.
The Lemmy server config indicates that is an optional setting to improve user privacy so requests don’t ever hit the original server from the client. Those cached files are only temporary and will be deleted after some time. So it’s not really full blown duplication.
The default setting is to only generate the thumbnails and store those locally (indefinitely?) but even that can be turned off. I checked and it appears that lemmy.world has the thumbnail generation disabled so all images from other instances just link to the original on that instance.
Ok, so Lemmy doesn’t cause the same amount of duplication, but I’d still argue that dedupe is valuable: it saves on hosting costs (your costs, in this case) and users will get a small advantage in having slightly higher cache hits.
For sure, I’ll add it to the list. :)