Thank you for digging into this matter. We have looked into the issue. You are correct - the thumbnail we use for preview is much smaller than the original and it is not the bottleneck. The issue occurs when processing the original image as we try to preserve the original size. In addition when rotating the image we use slightly bigger bitmap to render the image correctly.
We will consider evaluating the image size and if the image when needed scale it down automatically. This will result in creating different, smaller image than the input, so we will add it as an option.
Check out the Telerik Platform - the only platform that combines a rich set of UI tools with powerful cloud services to develop web, hybrid and native mobile apps.