It's nice to know that it is a Server bandwidth issue.. I'm guessing bandwidth and storage space are two factors to be balanced,
But why does it always come down to such simple and stupid implementations?
Being an Engineer, I wouldn't accept the permanently cater for the worst case and set a fixed lowest common demoninator, I'd make it dynamic.. either rate limit, or set a minimum upload interval at busy times, or any other solution..
The USB thing, I can't believe allowing one way only storage of common file formats (jpg/avi) is going to compromise any security, it only has to write files to the USB, it's not reading/using files from it, so surely the security risks are quite limited and can be defensively protected..