This is wildcards.
DNS servers for jpg.to contain only one record, like this:
*.jpg.to. A 107.20.205.231
When client asks for any domain which ends with jpg.to (for example car.jpg.to), DNS server on-the-fly "generates" an answer like this:
car.jpg.to. A 107.20.205.231
As you see, there is absolutelly no additional burden on the jpg.to DNS servers, on the contrary it have to store only one record.
Although, (for those not familiar with the topic), DNS system built in the way that there are intermediate, "caching" DNS servers. They will cache the actual answer like car.jpg.to, and not a wildcard. Thus once people query lost of different domains under jpg.to, caching server will store many records.
There is nothing wrong with using wildcard DNS. Wildcards defined in the internet standards (RFC 1034 section 4.3.3) and this little additional load is part of normal operation of DNS infrastructure.