You're downloading from the DropBox site using Safari, right?
The picture you see at first is a smaller view of the original, for display purposes.
To download the original version, tap on the Download button at the top and choose Direct Download. The original picture will be downloaded and displayed. See how much larger it is? Tap and hold for the option to save the image to the camera roll.
There is also an option to save the picture to your own DropBox account. I've never used it, but I assume it does what it says. You most likely need to be logged into DropBox for it to work.