Blogger updated the dialog that lets you insert photos. Now it uses horizontal tabs, just like in Gmail. You can upload photos, add photos from Picasa Web Albums/Google+ Photos, capture photos from your webcam or paste URLs. Blogger’s dialog has special sections that restrict Google+ Photos to images from your blog or from your phone (Auto Backup).
When you select “from your phone”, you can rotate photos or even delete them:
It’s interesting that Blogger still uses Picasa Web Albums instead of Google+ Photos, while also including a feature that’s only available if you use Google+: Auto Backup.
Blogger, Gmail and other Google services use the same Google Drive picker and customize it by adding a long list of parameters.