That's because Google today introduced a new feature inside Picasa Web Albums to help you manage all photographs/images uploaded to your blog hosted on Blogger.com.
Any photos you upload using Blogger will automatically appear in Picasa Web Albums. The title of your Blogger web album will match the title of that blog and contain those photos.
And for the first time, you can remove previously uploaded pictures from the Blogger server - If you delete a photo from your Blogger album on Picasa Web Albums, the photo will also be deleted from your blogspot blog.
You can also download the pictures uploaded to Blogger using Picasa software in one go. That makes it extremely easy to backup your Blogger Blogs.
There's also a hint that Google might be adding the delete feature in Blogger itself. The What's new page says - "If you delete a photo from Blogger it will also be deleted from Picasa Web Albums. " So we know what's coming in Blogger next.
Related: Unlimited Space for Storing Images on Blogger