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Pic Stitch fits as much of your image into the frame as possible without leaving any empty space. The reason is that the empty space looks bad. You can do one of two things to try to get the effect that you want.
One is that you can choose an aspect that better fits the images you plan to use. For example if you are using landscape photos choose a landscape aspect like 7x5 or 16x9. You can change the aspect by tapping the "Aspect" button. 
The other option is to simply use a different type of collage app. The sister app to Pic Stitch is called Photo Collage Creator and it is designed to allow you to create free style collages. You can find it here: