While we do optimize, we've identified a range of image sizes that aren't being created, which we are addressing but I don't have a target release date. This would result in more image sizes for the client to choose from and not having to fall back to these release large assets.
With that in mind, I would suggest considering where the image will be used. If, for example, you plan to design these to fit in a 2-column grid on iPad you are likely safe to upload a 1024x1024 image.
As I mentioned, there are some engineering efforts going on that will eliminate this choice on your end, but they aren't quite there yet.