My wife and I printed our own photos on our home printer. I had an urgent travel trip so I took my application to the passport office in DC. The lady behind the counter said that mine was "too grainy" and I had to go have new pictures made at the place next door.

My wife mailed hers in and received a new passport without incident. You can't tell the difference between ours with the plastic sheet they put over the photos.

I halfway wonder if there is a referral "fee" for everyone who gets sent to to the place next to the passport office.