Blogger team has added the Upload Image button to Edit HTML mode for users who are using Blogger in Draft for blogging as they announced on their blog:
We heard lots of feedback recently about how you’d like to be able to upload an image in the post editor’s Edit HTML mode, so we’ve added it into the new post editor’s toolbar with today’s release. You’ll see it right now if you go into the post editor. Hopefully this saves you a few extra clicks next time you need to add images to your posts.














