If the wallpaper is originally the size of the screen it should look good. If you resize a picture, no matter which direction or how you do it (unless you redraw it by hand), the quality goes down. If you put a 480X320 wallpaper on a 1080X960 screen it's going to look like mixed vegetables. Download wallpaper that's the same size (in pixels) as your screen in both directions, and it should look okay. (I change wallpaper just about every month, and all of them look pretty good - but I only download files that are the size of my screen. I've tried other sizes. Unless you want a closeup of the middle of the wallpaper, or a small wallpaper in the middle of a black screen, it doesn't look good resized.)
It's not Android, it's raster graphics. If wallpaper were vector graphics, you could resize it at will and it would look the same. And lag the phone to death.