Compressed pictures on Windows Phone?

What's the deal with the disgusting compressed pictures for everything from contacts to photo previews in the gallery app? Surely this thing (Lumia 900) is capable of displaying 180px by 180px pictures without compressing the hell out of them...

I thought the camera was so terrible because of the compression when viewing the pictures. Well, actually I think the camera is terrible, but not as bad as the gallery images make it seem. Any suggestions for a better gallery app are also welcome.

Thanks.

EDIT* IF anyone else was bugged by this, download the Nokia Creative Studio. What a great app. As I suspected, the pictures are not nearly as compressed as the default gallery makes them appear. The question about the contact tiles still stands. I think the pictures that were synced are to blame.