Looking into this, I can see how this might be an issue. Roll20 automatically creates several different sizes of each image you upload (thumb, med, max, original). The reason we do this is because people often upload a huge image (e.g. 1000x1000+ pixels) and then proceed to use it as a 70x70 pixel token on the screen. If we didn't create a smaller size, then your computer would run extremely slow since on every render it would have to do a lot of calculating to size down the image. However, this does present an issue for people who really want to have full control over exactly how an image looks in terms of recompression and whatnot. What I think the best approach would be is to increase the JPG quality when we do our resizing to something very high (possibly even 100%) for the really large image sizes (max, possibly also med) -- original is already uncompressed and is the original file, but it's only used if the image is larger than 2000x2000 pixels currently. I will work on making that change and let you know when it's implemented. If you don't want to wait for it to get fixed, in the meantime you can indeed use a PNG file, as those are not compressed/lossy even with the resizes. Normally I would recommend against using a PNG file for a image that large, but it shouldn't hurt your performance too badly as a temporary solution.
