After a day's testing (and my first real-world use!first real-world use!) I can see the need for three features that would be really great to have:
An eraser — might be half-way easy to implement? I don't know.
A reset button next to the "Save" button.
Maybe a very small text link pointing to the original image underneath the edited image?
One bug: If you leave the image's canvas while pressing the mouse button, and release the button outside the canvas, the script will not recognize that drawing has ended. The next time you mouse over the image, it will go on drawing. No idea whether anything can be done about that — maybe end drawing mode if the mouse cursor leaves the canvas?