This is ridiculous. I have never had a phone that is unable to just set the image as a wallpaper. Leave it to technology... The phone can tell you exactly where you are in the world, but can't save a picture to the background of your phone. Insane.
you're actually able to adjust the crop, so that you don't cut everything out... drag the sides of the crop box and you should be able to get most if not all your picture.