“If it’s okay to actually see the wife in person in such circles, then how is a problem to see a picture on the wall?”
Off the top of my head… a picture is made to be looked at, hopefully you aren’t looking at women. That being said, women (at least should be) avoid unnecessary facetime with strange men (even in their homes.) A picture can be, and is even specifically made to, be looked at repeatedly and for continued periods of time.
“You really can’t see the difference between the propriety of circulating something to thousands or millions and a picture hanging in the privacy of one’s home??”
Your home is open to guests. The only difference here is the quantity, not the concept.