What WordPress does is create several images for each image you upload. They might be sizes like 600 pixels wide, 300 pixels wide, 150 pixels wide and your original, full sized image.
If the image you upload is so large (like over 2000 pixels wide), then that image might never get used on the website but since you uploaded it, it'll technically reside on the server (in your Media Library).
If you upload lots of images for photo galleries, for example, and those images are in the neighborhood of 4000 pixels or even 6000 pixels wide, then you're wasting space because those images will never be put on a page. They'll be sitting in your hosting space, hogging up your account. You might soon get charged for exceeding the space in your hosting account.
Even some so called "unlimited" hosting plans do have limits if you read the fine print - they call files "nodes" and there are limits that they impose.
Before uploading images to WordPress, resize them. Bring them down to the maximum size you'll use. This is probably in the neighborhood of 800 pixels wide or maybe up to 1280 pixels wide but probably not higher than that. When you do this, you're reducing images sizes by half or more.
You can use a program like Microsoft Image Editor, Photoshop or Preview (Mac) to resize images.
If you really want to do things using the best practices, you should optimize all images that you upload to your website. This ensures your images (your website) will load as quickly as possible. Extra information is stripped from images and the resolution is brought down just enough so the image still looks good.
Here are some online tools you can use to optimize images:
If you like paying for more website space that you don't need or you want your website to load slowly, you can go ahead and just upload images straight from your camera or phone without reducing the size or optimizing them.
If you would like your website to load quickly (which helps with SEO) and use less space in your website hosting account, then use the tips here to have a better website that costs you less.