Why don't my uploaded images drop into the book or iPad?
The generic book and iPad images you see when you first create a book page are placeholders only. When you upload your own image, yours will override those defaults. Basically, you're making a swap.
That said, we do see the potential in enabling images to drop into an image stencil. For example, you would upload a flat, non-3D cover image (no border or other framing) and Booklaunch.io would render it into an awesome graphic. We're not there yet, but we're working our way in that direction.