Thanks to a forum discussion I saw this bug and decided to throw in my opinion. I have two basic comments:
1) Is 'upload' always the primary method at every institution? What about if places use an institutional repository, so they never ever want to use upload?
Perhaps there should be an admin option: 'Default shortcut repository', which defaults to file upload. Then an API for each repository to create its shortcut mini-controls (optional to implement this; you can only select repos that implement it; file upload would be the only core one that implements it)...
2) When I personally use Moodle I do often want to do upload so I like this feature. I would suggest an implementation like the following:
A For image upload, in top line of form
[Find an image...] [ ... file field... ] [ Quick upload ]
note: I prefer having an 'upload' button than random autosubmitting disturboforms, even if it does add one click.
note: changed text of 'Find or upload an image' for obvious reason
Obviously putting in a file and uploading it would have the same effect as clicking browse repository, clicking upload if not already selected, clicking browse and uploading the file there. So it saves 1/2 clicks but perhaps more importantly it saves a lot of interface complexity, ie there is no big scary screen.
B For other uploads, in moodle form file picker
[ Add... ] [ ... file field... ] [Quick upload]
Not sure this is quite the same as what was already proposed or not.
In both cases I guess these would have to be done in some marginally horrible way (iframe).