Yes, it is iBook store. I have had this problem with them - and it only refers to the cover that is stored in the epub itself, and not the cover on their site. However it applies to ALL images in the epub, none of them can be bigger than that size. If its 3.2mp now, that be great because it used to be much smaller. It is one of the reasons I have to keep a separate version of my epub just for Smashwords (who distros to Apple for me).
Its annoying, but trust me 99.99% of the people who will look at your cover on their reading devices will not be able tell the difference. Shrink the file and carry on, IMO.
