Simple math really, they only allow certain size images to be used, so they reduce the image size if it exceeds the pixel size permitted, without reference to whether it looks good or not.....
signature pics can be any size if uploaded on an external host like imageshack, imgur but some forums have a set limit on what youre allowed.
typically people use a 3:1 size ratio eg; 300x100 pixels.
youll either be told a certain pixel limit or kb filesize not to exceed when uploading.
Sig image sizes have been reduced because it was really getting out of hand with people posting huge banners, promoting all kinds of stuff. So what happens in a thread is that it takes away from the content and you end up scrolling endlessly to read the posts. Those who still show big sigs are the ones who uploaded them before I made this change.