Well the issue is specifically a server problem IE GD2 which steals all PHP memory trying to process an image so its not a problem with the script.
We tell people using GD2 to increase PHP memory because the issue is nowadays people are uploading larger and larger images and GD is bad with large images.
You can limit filesizes to say a smaller size. I would suggest cause quite possible your user uploads directories may be clogged with files is to clear all directories beneath uploads. Make sure to put a decent respectible filesize limit in usergroups settings never leave it wide open. Then try uploads again. If you give the program no limits it is going to default to PHP and PHP is notorious for being user unfriendly when it comes to errors usually just throwing white pages.