System Information
Operating system: Ubuntu 18.04 LTS
Graphics card: Nvidia GTX 1060

Blender Version
Broken on all Versions of Blender: 2.79b and 2.8RC2

Short description of error
When you import an image into Blender VSE, that has a larger resolution than the render resolution, blender can't shrink (transform) to show the full image. Instead blender shrinks the cropped image. This has been an issue with Blender as long as I have been teaching it -- since 2013.

Exact steps for others to reproduce the error

1. Set your render resolution in blender to 1280x720
2. import an image that is 1920x1080 into the VSE.
3. Check mark "Offset" in image properties. This will zoom in a cropped version of the image.
4. Create a Transform Effect strip for the image.
5. Select "Uniform Scale" on the Transform Strip and shrink the image.
6. Only the cropped image will shrink.