I don't have any problem resizing.
According to the signature editing page, if you use the Signature Picture feature it says pics must be 500 by 100 pixels or 2.0 KB (whichever is smaller).
I kept reducing the crap out of my picture and could not get past either of those requirements. Looking at everyone elses pics I could see that they were all bigger than my original picture so it didn't make sense.
Now I've put the banner as a link in the Signature text portion and it works like everyone elses. No size limits there. Like I said, cheating but it works. So I suspect nobody is using the official Sig Pic feature.