Adding some info to the case...

Locally I had the local IIS (Express/ Cassini or whatever), and that worked fine

Now I switched to my local IIS 7.5, and same problem occur as on the stage server, files are 0 bytes.

Even though I tried with app identity "LocalSystem".

Sounds familiar?

Solved!

It turned out that I was doing something wrong with the blob writing, it never worked ...

When uploading files with http it is enough with:

var contentRepository = ServiceLocator.Current.GetInstance<IContentRepository>();
var blobFactory = ServiceLocator.Current.GetInstance<BlobFactory>();

HttpPostedFile file = Request.Files[0];

var file1 = contentRepository.GetDefault<GenericMedia>(publikation.AssetFolder);

string filename = DateTime.Now.ToString("yyyy-MM-dd_HHmm") + Path.GetExtension(file.FileName);

file1.Name = filename;

var blob = blobFactory.CreateBlob(file1.BinaryDataContainer, Path.GetExtension(file.FileName));

blob.Write(file.InputStream);

file1.BinaryData = blob;
item.FileRef = contentRepository.Save(file1, SaveAction.Publish, EPiServer.Security.AccessLevel.NoAccess);