Cropping results in poor quality picture

I was trying to crop a picture from my daughter's soccer game. The first thing I did was just to zoom in on the section I wanted to crop to and take a look at it and see if I thought it was going to be a good picture. Then I returned to normal size and clicked Edit and chose the cropping feature and cropped it using a 3x5 constraint. When I did that it removed everything outside the cropping area, of course, and enlarged the picture to the size of the picture area of iPhoto. The problem was that the picture was now pixilated - much more so than when I zoomed in on it at first. When I zoomed in, the quality was still quite good, but after cropping the quality was pretty poor.

So then I decided to export the file from iPhoto. I then opened it in Paint.NET in my Win7 VM under VMWare Fusion. When I cropped it there, there was no noticeable pixelation - it looked just like it had in iPhoto when I used the Zoom feature. Why is the cropping feature so poor in iPhoto? It's hard to imagine I'm doing something wrong - there's not much to it in terms of options. Why would Zoom exhibit no pixelation, yet Crop does?