I let it run for a while and it actually got up to "33 of 2.5 MB" before I gave up. It did the same thing after killing and restarting Mail.
The raw message was, in fact, 2.5 MB (for a 1.9 MB JPEG).
I remember one ISP I used to have (crl.com, now defunct) that, sometimes when I checked my mail, the one message that was in my inbox would somehow duplicate itself. As in, duplicate itself thousands of times. The more I tried to download and delete them, the more they duplicated themselves, sorcerer's apprentice style. I finally would have to log into my shell and delete them.
I reported it to their support department. They blamed my mail client. As if there was any possible input to a POP server that would make 'hydra mode' be considered sane behavior.
For what it's worth, base64-encoding something expands its byte count by a factor of about 1.37 (scroll down to "MIME"). Your 2.5MB download for a 1.9MB JPEG--an expansion by about 1.32x--matches that pretty closely. It's not an excuse for Apple, but it is an explanation. It's a handy factoid to keep in mind if you've got a mail server rejecting large attachments and need to increase the limit.
Y'know, something tells me Jamie already knows this…
D'oh! Yes, he probably does. It just came up recently, so I had it on my mind.