The Key is here ?
"XBMC uses the compressed format DXT1 or DXT5 in the form of a .dds file. These are GPU-friendly compressed formats which allow for very fast loading of textures. It comes at the disadvantage of a loss in quality - DXT compression can in some cases be very bad quality. Kodi uses libsquish which is reasonably optimal at compressing the images. In the future Kodi may use DXT5 in the YCoCg colour space which is the same size as DXT5 (i.e. 8bits/pixel) but is visually close to being lossless. For now, if Kodi deems the quality isn't quite good enough to use DXT1 or DXT5, we use ARGB (i.e. 32bits/pixel) which can result in some very large images on disk. On systems with slow disk access, these may take longer to load than .jpg or .png versions."