If they've discovered that large avatars and signatures are part of the performance problems we've had since moving to the new host, I'm all for it.
I'm not even aware of any performance problems. Did I miss a thread? These decisions didn't have much to do with bandwidth, though.
For the avatars, the 80x80 limit has been in place since the start of the site, and at the time I assumed it it applied to offsite avatars as well. This was to correct that, while bringing the size limit more in line with what is fairly standard most places. It was also an option to leave offsite avatars enabled and apply the limit to those (though I'm not sure how much coding that would involve), but there's no reason for that; 10kb per user is not going to dent the server space, and offsite avatars are potentially a loading problem.
For the signatures... ~shrug~ I've had a lot of complaints. Myself, I generally have signatures turned off, and only have them on to monitor them in a game I have banned them for; if I had had a more active hand in setting up the software originally, I might well have gotten rid of them entirely. But I know most people like having a little something (if only to help separate and identify posts). Part of getting rid of the tags is a tackiness issue. I know if I visited a forum and stumbled across a thread where half the posts had large colorful distracting images attached to them, I wouldn't be inclined to stay. Part of it is that such things will be better suited for profile additions (see Site Ideas, for those that haven't already) and hopefully this will encourage people to limit their signatures to a line or two. There is simply no need for so much distracting filler surrounding all the posts.
But to answer your actual question, yes, this is a benevolent dictatorship. It always has been. Most of the daily upkeep of the site is done by others (I can't do everything), but most decisions do ultimately go through me.