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I have E4 dual, that I guess has the same camera, but picture quality is very satisfactory at least for the price range and certainly not 0.5 mp that you mention. Check for the picture quality in the settings menu. In my phone it was originaly setup at 3mp 16:9 and changed it myself at 5mp 4:3. The only sad thing is that you can't have 5mp 16:9 automatically, so in this case you have to crop the pics yourself. But anyway who cares if it is 4:3 or 16:9.
Also clean carefully one more time the lenses as invisible hand dirt or moisture could affect significantly the quality.