Should I be able to serve .jpg files?
But of course. A jpg file is just a binary data file. Nothing magic about it.
I can send text no sweat but jpg files just grind and grind and eventually time-out.
So, you can store text in SRAM and send it. Where are you storing this jpg file? There is only 2K of SRAM on most Arduinos. Hardly enough to store any data that will take any time at all to send.
Most likely, its a coding issue. Hint, hint.