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If you have a broken file, Nikola crashing is the correct behavior, because that file probably won’t be recognized by browsers either, and you will end up with garbage output. In my opinion, this can be left as-is for the user to fix themselves.

I see the value of what you're saying.
Bad images should not reach the browser. So isn't it better to log an error and not process the image further. This ensures that the image does not reach the output and also users won't have to see an ugly back-trace.

A hard crash works better here IMO than just a warning and continuing with a build.

How about improving the error message by printing it with self.logger.error() and then calling sys.exit()? Then the user won't see the ugly stack trace, and the build will still stop.