This is because the CSS width of the container is set to 48% and your image is set to 100% width. That means it is ignoring your 300x300px and stretching it 100% to fill the width.
So to resolve this, either you can reduce the width of the container or change width:100% to max-width:100% which will make your image be as wide as the width set which in your case would be 300.
Look for the following CSS in woocommerce.css or you can override it in your theme.
.woocommerce div.product div.images img, .woocommerce #content div.product div.images img, .woocommerce-page div.product div.images img, .woocommerce-page #content div.product div.images img