If you don't like your avatar (and a lot of people do, actually...), I can't think of anywhere you need to use it, with the possible exception of the card on your fantasy profile. Where is it you want to "ban" your avatar and can't?
re: pictures in message board posts
Message heard. Not as simple as you'd think, if we also want to make sure the site doesn't end up bombarded with spam, abuse, porn, hacks to steal your login, etc. etc. We tend to care about things like that
But we do know you'd like this, and we're always working on ways to get you what you want. Hopefully someday...
re: the new feature in general
I'm really pleased to read the response here. Personally, I was viewing this feature as more addition by subtraction; the biggest value for me is it further protects your privacy by giving you more control over when, where, and how you choose to expose your Yahoo ID. The fact that people are enjoying the exposure of your Yahoo identity makes it that much the better.