Ok guys, this is a new feature which I came across while exploring BCS. BCS now supports getting BLOBs into SharePoint and provide many features which help in pulling and streaming BLOB's out to end user.
The work which I did on this has been published as a whitepaper courtsey to some folks in Redmond. Here is the link to published article:
Want to say thanks to Arpan, Michal Gideoni, Brad Stevenson, Juan Balmori Labra and Beck Andros for providing all the support to write this article.