Add logo to picture

Two factors explain that behaviour.

First, your jpeg logo is much too small in pixel size compared to your target picture.

Then, what you are seeing when dragging from the photo bin is the normal way to place a file from the photo bin as a new smart layer over your background (the displayed target file). A smart layer is a full size copy of the dragged file which is stored in your working file, but which is not displayed before you move it over your background; then you see a preview rectangle centered in your image, and sized to just fill the background. The purpose is to let you do three actions at the same time: resizing, placing and possibly rotating. You have to use the Move tool for this. What you see after releasing the dragging action is a 'preview' of the action;  you can use the move tool any time later in your editing session to change size, location or tilt; the preview is re-calculated again from the stored full size source file. There is absolutely no cumulative quality loss (resolution) if you resize the smart layer and even if you upsize the whole working file. The preview always take into account the full size of the dragged file.

Note that when you drag a file from the photo bin, your dragged file may be much larger or smaller than the expected result of a simple copy and paste. It would be akward to downsize the dragged file when it is much bigger than the background. So the preview is downsized to first fit into the canvas. It would be dangerous to show a very small preview in your case: the preview is never upsized which shows you the resolution of the dragged file is not enough.

When you are happy with the placement and location of the dragged file, you can 'simplify' the smart layer, which replaces it by a normal layer and discards the full size copy. You can now use all the layer tools and the final size of your psd/tiff layered file is much smaller.

Dragging from the photo bin is not the only way to add a file as a layer, you can use copy and paste, the 'place' command or dragging a layer from another open file. The smart layer also has the big advantage that you don't have to do any resolution calculations or prior resizing before placing the logo.

In your case, you should have a jpeg logo of a bigger size.

Use the move tool and drag on the corner handles to resize. Then click in the middle to drag top-right into position.