Google Cloud Storage seems more cost effective than the App Engine Blobstore.
At the moment I am storing user-uploaded image files as Blob
I try to give a different answer. I would suggest Picasa as the image storage in common situation.
I ran into the same question when Google stopped to serve Google Storage for free. But then I noticed that Picasa is free for pictures smaller than 2048x2048 when your Google plus account is enabled. And it's still more cost-effective for paid-storage.
So if you are going to store small pictures like profile pictures, I would suggest App Engine Blobstore. If you are dealing with some more photos and pictures, take a look at Picasa.
Note that with the latest release, there's now an API for accessing Cloud Storage from App Engine.
The Blobstore is tightly integrated with App Engine, while Cloud Storage is offered stand-alone. Otherwise, they look like different interfaces to the same basic service.
I don't see any good technical reason for them to be priced differently; perhaps it's a marketing thing.
The Blobstore has a more mature API and does some neat stuff like making thumbnails on the fly without incurring extra storage. The Cloud Storage API is experimental and rapidly changing. They're both perfectly capable of storing large images. To choose, you'll need to decide if the Blobstore's more rubust API justifies the nominally higher cost.
Well, As of Dec 19 2014 It looks like GCS is the way to go. stated on https://cloud.google.com/appengine/docs/java/storage#alternative_storage_solutions
Google Cloud Storage is recommended over using the Blobstore API.