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This issue did not show up earlier because the old wallpaper picker
only contained jpeg images.

Also changes |shrink_to_fit| to true.

Bug: 852844
Change-Id: Ia26a091ee38a6de43454eda0243ff24386e77da8
Reviewed-on: https://chromium-review.googlesource.com/1101400Reviewed-by: Weidong Guo <weidongg@chromium.org>
Commit-Queue: Wenzhao (Colin) Zang <wzang@chromium.org>
Cr-Commit-Position: refs/heads/master@{#567435}