XImage.Save(file, format, resolution) ignores resolution

I am attempting to reduce the size of my PDF files by replacing images with "shrunken" images.

To shrink the images, I am attempting to use XImage.Save() with a resolution of 144 DPI.

The size of the image saved is not reduced in any way; and calling Resources.Images.Replace() seems to be resulting in a larger file than the original!

What can I do to make this work correctly?

The attached .zip file contains three files:
Original:                  (S)TEST Color 600 highest.pdf
Exported Image:     (S)TEST Color 600 highest.pdf.Page 1.1.Bmp
Final:                      (S)TEST Color 600 highest.pdf.final.pdf

Here is the conversion function:

   private static void ReduceImageSizes(string inFile, string outFile, int pixelsPerInch) {
      pdf.Document pdfDocument = new pdf.Document(inFile);

      foreach (pdf.Page page in pdfDocument.Pages) {
        int idx = 1;
        foreach (pdf.XImage image in page.Resources.Images) {
          try {
            System.Drawing.Imaging.ImageFormat fmt = System.Drawing.Imaging.ImageFormat.Bmp;
            string filename = IBSCompression.MakeTempFilename(inFile, "Page " + idx, fmt.ToString());
            using (var imageStream = new FileStream(filename, FileMode.CreateNew)) {

              image.Save(imageStream, fmt, pixelsPerInch);

              // todo: resize image to (image.Width * pixelsPerInch) * (image.Height * pixelsPerInch)

              imageStream.Seek(0, SeekOrigin.Begin);
              page.Resources.Images.Replace(idx, imageStream);
            }
          } catch (Exception) {
            // ignore the exception
          }
          idx = idx + 1;
        }

      }
      pdfDocument.Save(outFile);
    }