Because you're not using HTML. Ezcodes and the like only work on the board in posts, not for things like signatures etc.

Here's how you'd do it:

[IMG SRC=http://www.uglypeople.com/uglycelebs/up-images/up-celebs-00007.jpg]

... replacing the '[ ]' with '< >'.

So now your pic should work:

<IMG SRC=http://www.uglypeople.com/uglycelebs/up-images/up-celebs-00007.jpg>