This happens when you update your profile/avatar picture on one of your networks. I noticed this yesterday when I changed my Microsoft account picture on my Windows 8 laptop. The picture got pixelated on my 8X and on my main desktop computer with Windows 8. The same happens with wallpapers between Windows 8 computers, even the "original" (the one you set on one computer) becomes pixelated after it syncs to other devices.
On WP8, the easy fix is to go to the Me tile, tap on the picture to change it and select the same picture and publish it to Twitter or Facebook. I like to have the same picture on all of my networks so If I want to use another picture, I change Outlook first (can also be change from Windows Live Messenger or Windows 8 Me app) and Facebook and Twitter.
It's a problem on their servers I guess because of the issue I described with wallpapers on Windows 8.