It doesn’t reallyâ€¦
iPad 2 can save an image up to 16 megapixels.
If your image is larger than your iPad supports, the image will be downsampled to the maximum supported megapixels.
You can also run into some problems with image files from iPhoto being synced via iTunes. If the longest dimension is greater than 2048 your photos will be downsized to that limitation.
Using an app like DropBox will get around this ‘feature‘
Hope this helps â€“ kinda, sorta, maybe 😕