You want targeted traffic, bulk traffic is relatively worthless if you don't filter it. For fucks sake though,
don't scrap the project. Install analytics tools and weed out the shitty referring sites, and replace them with better quality sites, or try to build landing pages for each of your surfer types. If you have 30k hits a day you can work with it to get signups, no matter how shitty the traffic is. Everyone starts somewhere, and you started in the fast lane.
read this article
And as for bandwidth, you need fewer thumbs per page. More pages.
http://galleriepages.com/freesites/
does this scam actually convert for anyone?