Originally Posted by kovidgoyal
Actually as of 0.6.7 calibre already offers a no default cover option for EPUB output.
As for why it resizes covers, that's because most people find a little bit of distortion better than the postage stamp look.
The "no default" option doesn't work quite right. When selected, calibre should not grab the first image in the file as the cover.
I also opened the epub and can see that you stretch the image when displayed, not when the ebook is created. At the very least you need to add a width tag in there as well. Otherwise images that are wider than they are tall will hang off the side of the window.
Here is the thing about stretching the cover. Conversion isn't supposed to introduce new elements; that is something that is done at the time the ebook is created. Instead, conversion is supposed to faithfully replicate the existing content.
As a rule, conversion is _only_ supposed to override the creator _only_ when the change is an unquestionable improvement. At least, that's how I see it.