The beta text editor is looking good and has an option to insert images via url.
However for most end users they will need a simple image upload.

The kendoupload means you already have much of the required functionality, it just needs to upload the image and return the url.

Also options such as adding title, alt, resizing and alignment will be good.

We currently use ckeditor and until the advanced image options are matched will not be able to move this over to kendo.