I'm thinking it has to do something with the budget cuts Ned has been working on. After cutting the Steemit inc staff by 70% he put forth a spread sheet of some new changes...
https://steemit.com/steemit/@ned/steemit-inc-blockchain-roadmap-and-cost-reductions
At the bottom of the spreadsheet you can see he wrote "store smaller versions of images" - perhaps this could account for the pixilation when recalled?
I could understand that they don't have space to store high quality pictures, but what I do not understand is why the images don't work if they are sources from outside of the blockchain.
Use some other front end. There are plenty of them: busy.org, steempeak.com etc.