I've been similarly frustrated trying to get images to scale on LW, so looking forward to an answer (although maybe the new editor just eliminates this problem, outside using markdown?).
In draft-JS (the old wysiwig editor) you should be able to scale images via dragging the corner (same for the new editor).
I'm not sure offhand about markdown. It sounds like our markdown plugin doesn't support the common markdown image scaling syntax. We'll look into it, but it my be awhile since we have to fit it in with other priorities.
I am also running into this problem now with the Markdown editor. I switched over from the new rich editor because that one didn't support footnotes, whereas the Markdown one does. It seems like there is no editor that can both scale images and do footnotes, which is frustrating.
Edit: I ended up going with the rich editor despite broken footnotes since that seemed like the less bad of the two problems.
When embedding an image using the markdown editor, is it possible to specify the image dimensions? It seems that both of these do not work:
Inline HTML:
Some markdown variant I found on stackoverflow: