The queen is Commander-In-Chief of the British Armed Forces, whenever anyone fights in a war for this country they are doing it in her name, even though it's the government who decides to send them in to fight. Also remember she served in the Second World War so will possibly have more of an appreciation of what it means than a lot of other people, me included. (I highly appreciate past and current servicemen, but haven't been where they have so don't understand it as much as they do.)
It would be like e.g. talking about Microsoft and putting a picture of Bill Gates up instead of members of staff. (Not the best comparison but I hope you get the comparison). Or talking about another countries war and putting a picture of their president/prime minister/king/leader etc. up.
Yes, it would be good to see more pictures of servicemen/women, but I can't see the problem with pictures of the royal family paying their respects for the people who fought/fight in their name.
As an aside, I have just done a quick Google on this and discovered servicemen don't swear allegiance to the government, only the monarch (already knew that bit) but police do the same. This is to ensure that Government Officials (including the Prime Minister) can be arrested for committing indictable offences just like any normal citizen, and are therefore not 'above the law' unlike the Monarch.
Looks like the queen can't be arrested, even if she commits a crime. (Of course, police and many others will already know this, but I've learned something new today.)