People who were paying attention actually saw this coming! Checkitout:
"Other changes in the Photos app are primarily cloud-related. The default Photo Stream functionality has changed in a way that regular people will probably like but that we personally find annoying. iOS 8 does away with the concept of the "camera roll," the album of photos taken locally on the device you're actually holding in your hands. Now iCloud photos and local photos all mix together into one continuous stream.
"Many will like this because it makes all of your stuff available everywhere, and it means you won't have to poke around in different albums to find a picture if you don't remember whether you took it on your iPhone or iPad. If you're taking a few hundred screenshots for something like this review, though, it's a little irritating to get screenshots from multiple devices plus pictures from iPhoto all mixed together. You've got to turn Photo Stream off if you only want to see the stuff that's actually on your device.
"Finally, there's that iCloud Photo Library feature Apple talked up at WWDC, which has made it to the GM build of iOS 8—but only as a disabled-by-default beta version. It's similar to Photo Stream, but it differs in a few key ways. Both offer to sync photos between your various Apple devices using iCloud, but Photo Stream will only save pictures for 30 days or until you upload more than 1,000 photos, whichever happens first. iCloud Photo Library won't delete photos automatically. Photo Stream photos don't count against your iCloud storage space, however, but iCloud Photo Library pictures will. You'll definitely need to pony up for more iCloud storage space if you're anything more than a casual photographer.
"If you still want to use iCloud Photo Library, there's nothing here to stop you. However, that "Beta" tag means "proceed with caution, because we aren't ready to promise that this thing won't eat all your pictures." You're prompted to back up your iPhone's local photo library to your computer before getting started, and you should be extra attentive to performing those kinds of backups for as long as that beta tag applies (we'd look for it to be removed either when Yosemite releases later this year, or when the OS X version of the Photos app comes out early next year)."
http://arstechnica.com/apple/2014/09/ios-8-thoroughly-reviewed/9/#pics