Why? Because of this obscure point: If Backlinks are enabled in your Blogger beta blog (how's that for a tongue twister???), Picasa cannot post pictures there. Thanks to http://knownissues.blogspot.com/search/label/picasa :
You cannot post from Picasa to Blogger in beta if you have backlinks turned on.OK now that I've turned off the backlinks to my baby's blogs, the pictures come alive again!