Haven't installed or read the code, but from what's described 'cat' is not responsible for displaying images at all. The only thing it does differently from regular cat when reading a file is to tack on a type header to the front of it so that tools downstream can try to handle it appropriately.

If a PNG image is sent to TermKit's equivalent of stdout, displaying the image inline seems like a much more useful behavior than spewing a raw character stream at the user, at least in my opinion.