Do you really think it would be a rediculously complicated task to implement the whole overlay thing if they chose to do it?
If they implemented it in game it would be complex. It isn't a simple task, but it can be done. They have to have an import function. The player will need to adjust the character so that the angle matches that of the picture which is a whole set of new functions. They need to add the ability to make your image transparent, maybe even varying degrees of transparency.
If they were to create something like that for the website, then it would be ridiculously complicated because they would need to recreate the alien creator from scratch so it could work online, plus the stuff I mentioned above. Plus I'm sure that everything I've said is only the tip of the iceberg.
I don't have much experience when it comes to creating video games, but I do have lots of programming and web design experience, and I can tell you that somethings are much easier said than done. Many users see the end product but don't realize the amount of time and effort that has been put into it.
You spend countless hours of programming only to find out you have 100 errors. You spend a half hour trying to solve the errors, realizing you could have gotten rid of half of them a long time ago if you only noticed that damned ; was missing. So you add it and now you have 120 errors! Finally you debug the entire thing, you are able to run it. Now you run through the game and find bugs here and there. You go back to the code and try to work it our. More hours are spent debugging.
The worst thing is that I'm not even exaggerating, all of that is entirely possible and is pretty much what happens.
EDIT: Sorry for the long post, I didn't realize it was so long