but wouldn't the compression artefact's be found throughout the images if it is a algorithm issue?
Remember they're supposed to be caused by cosmic rays, which would illuminate a single pixel extremely brightly without necessarily affecting its immediate neighbors. Something that pretty much no ordinary scene would do, not even an actual blob. You example picture doesn't show how JPEG fails to cope with sharp points.
I guess one way to solve it would be have the onboard computer check for these things and take another picture immediately after. But then people would complain that it's censoring things!
and why would ESA and NASA put such a crappy camera system
It's not the camera, it's the compression. They already resolved it by getting higher quality versions of the exact same images after they fixed one of the receiving stations on Earth. Those new images show the small points as much more like small points.
I guess you'd be happy if they just shut everything down when there's a failure, rather than trying to squeeze whatever data they can from it.
after all its not a project to find extraterrestrial life
is it.
Exactly. But if it does happen to pick up actual objects (who said anything about life?), then they'll look like objects, and won't be explainable as cosmic rays with compression artifacts.