The maximum non-animated file size you can upload is 10MB. However, if the image is over 1MB then it will automatically be compressed or resized to 1MB, for better viewing on the net. The maximum animated file size (both GIF and PNG) is 2MB.
PNG around 1MB are getting optimized I guess. You might try to drop the filesize a bit more before uploading to IMGUR.
Why? - I ask like a spoiled child. But seriously, why? And will it ever change? I garnered a lot of downvotes for posting a .jpg in a .png cutout subreddit, and I hold you people accountable! ^^ Thanks in advance.
eeerrmmm my 700kb png is turning into a jpg? What's that all about