Description of your request or bug report:
I mentioned this a while ago, but I don’t think I ever wrote up a request for this. You should create lower dimension source images when the rendered images are significantly smaller that the original size. Oddly, when you use too-high dimension images, it actually makes the quality worse.
Here is the original source (about 350x350 when square) shown on my list:
Here’s how it looks when the image is replaced with one that is only 88x88 (25%):
Notice how there’s a lot less weird artifacts when using the smaller dimensions. Naturally if you zoom in, the full size version looks better, but that’s not a major use case.
Original image for reference
For what it’s worth, this is what Discourse does with profile pictures. They have copies at various sizes since they display them at various sizes.