There is no 'proper' resolutionuse a wallpaper the exact resolution of the screen, or larger, and iOS 7 will still scale it up, blurring the image in the process for a decidedly un-Apple effect. Might as well skip it.
Such a shame, too. Parallax is cool. And OP's logic was sound thinking there should be a minimum resolution at least enough larger than the screen to provide wiggle room. That's absolutely how they should do it.
So if I turn on Reduce Motion, effectively turning off Parallax, is the wallpaper still scaled?