It's also not what a browser should do.

JPEG conversions will vary in quality and size. On some sites (e.g. a CMS), quality can be sacrified to stay within file size limits.

On other sites, like photo printing services, quality is much more important.

These may be unusual cases, but silent browser assumptions are still an overstep.

There's nothing stopping the user from doing a conversion themselves if they want to (and know how, which is asking a lot).

The server is saying it can't read the other file type, so the alternative is to fail.

There's a medium option: have an alert popup saying

    Convert the image to a format the site accepts (jpg)?

    [ ] Don't show this message again

    [OK] [Cancel]

Anecdotally, yesterday I accidentally learned that my relative clicks OK in any dialog window within 200ms without even attempt to read the message. So the alert you suggest would slightly help 1% of geeks and will annoy 99% of the users.

Compared to the option of not converting, it would help everyone, reducing annoyance.

Also I'm not sure if you can generalize from your one relative to 99% of users.

While it may not be 99%, /r/talesfromtechsupport on reddit has enough instances of this to suggest it is extremely common user behavior.