I ran a couple of groups on Yahoogroups a few years ago and it was nothing but a hassle. Sure, the feature list sounds great, but in implementation things needed constant attention. End users would report not receiving any mail for days or weeks at a time (no, it wasn't even in their spam folders; they just disappeared) and logging in/creating accounts was sometimes problematic. At least at the time, there were three ways to add a user: I could add their email address, they could send an email to firstname.lastname@example.org, or they could create a yahoo account and join through the web interface. Choosing either of the first two options left their account in some sort of half-created limbo where they got the group email but weren't able to sign in to the web interface (to change settings, view photos, etc). There were other minor issues, but those were the two I constantly fought against.
All that being said, it wasn't the worst service I've ever used and it was free, but I was always waiting for the next breakage or issue that would require my manual intervention. They could have greatly improved the service since then; it's been about two years since I migrated away, but I wouldn't personally recommend it. We miss some of the features (the two you mention, file storage and photo sharing), but I'm glad to be rid of the administrative workload.