I can't imagine it being too far out as the seat tube angle is usually 73 or 74 degrees so shouldn't put your knee/axel alignment out. Doesn't matter if you got a smaller frame, as the seat height will be the same, but there may be a slight change in seat tube angle, but not enough to suddenly make it fit.
It looks the right size to me. Have you run a line down from the front of your knee to see where it intersects the axel ? (piece of string with a weight on end) Starting rule is directly over axel, but it's no "be all and end all" as we are all different sizes.