I believe that large hard drives will be gone in a few years.
They may be, but before they go ubiquitous ultra-fast broadband will need to be standard. I'll put to you this way: Assuming you buy a Mac every 6 years, your next mac may not have a CD/DVD drive, but it will have a large HD, and so will the one you buy after that. There is simply no service online that has the speed or responsiveness of a HD for dealing with the large volumes of data involved in a Photo Library - however managed.
But when ever I try uploading old photos somewhere they either end up as numbered files or organized in single photo format and not in events.
What are you trying to upload, and to where, exactly? Also, what version of iPhoto do you actually have?
And yes, let's be quite clear. You can put your Library anywhere you want. It might get corrupted and if not, perform slow as molasses, but that's up to you.