"...This is beginning to get my attention. .."
No shit
So that wasn't you referring people to hosted galleries left and right untill just recently?
But seriously: Hosted galleries are for tgp owners. No tgp posts sponsor galleries of other webmasters.
Besides that, it's not different than paying for tgp slots to get more and guaranteed expsoure for your galleries, just that you pay with bandwidth instead of cash.
So... no, you are wrong,
and there ain't no loophole, and it is perfectly within any standard license agreement
"...yet one can easily set up hosted ones and get the same results... .."
What are you trying to get at here? Same results as in "earn money, too".
Puff puff pass
typos