#1) I don't choose the photos. I let Facebook import them. I'm not going to go around asking each person if I can take a professional photo with my iPhone just for contact photos. In fact, I have absolutely no reliance on contact photos, because if you haven't noticed, the person's name also shows up and I can read.
#2) How do you know it would be ugly? Have you personally made a mock-up that you can share of how it would look?
#3) A couple of people on the internet ≠ large population. If you sampled 1/4th of iPhone owners on iOS 7.1 at random, I doubt any of them will really care.
#4) Unless you can't read or you don't know any of your contacts by any form of a name, wether or not you have a large full screen photo or a smaller one that's still visible in the corner.
#5) Today I decided to really look at the call screen on my iPhone 5 running iOS 7.0.4, and I noticed then that the picture of the caller doesn't take up the whole screen at all! It still shows up in a circle next to the name! Why weren't people complaining about this before if it's such a big issue (and I am NOT on iOS 7.1, I am on 7.0.4)
I can appreciate everyone's opinion, because we are all different. That's exactly why they should make the full screen caller IDs optional. Many people liked it, many people didn't, a switch would perfectly solve this issue.
I'd like to reflect on some, you said.
1) No need to be arrogant ("if you haven't noticed"). I, for one, have multiple contacts with the same name, eg. John Smith. I used to be able to tell which one is calling at a glance. No need to pick up, and look at the phone. It was especially good when driving. Now I have to actually look at the phone, bring it closer to my eye. I think you'll understand that after 40, some of your ability degrades. My vision is not what it used to be, but still it's fairly good, but that small picture in the corner is impossible to see without actually focusing on it. Elders, visually impaired are HAVING trouble with it too. I don't know if you read it, but a few posts back there was an apple discussions forum link. I started that thread, and have received a good amount of response, both from youngers and elders. They list a couple of more good reasons, if you have time I advise you to get there.
3) Well there is this thread here, the apple discussion thread, and a poll on 9to5mac. All of them show there really is need for full screen caller IDs. Furthermore, once again, we are all different, I think a simple switch to set it small or full screen would solve the issue.
4) I've already described this in 1), it's difficult to see the picture, it's too small. It's also not too practical, since the 3/4th of the screen is just blurred and empty.
I don't care if they change the button's shapes, or recolor them, rearrange them. Those don't really have impact on usage. But this change is not just design, it impacts the usability (for me), and I am having trouble recognising who is calling me.
5) There was a way before iOS 7.1 to set them small or large depending on how you add the photo. All I ask is for an option like that.