iPhone Simulator Screenshot Size Became Small after XCode Update

Solution 1: (from Kip's answer)

in Simulator menu uncheck the option Debug > Optimize Rendering for Window Scale.

Solution 2:

Simulators menu chose Window->Scale->100%. (keyboard shortcut: ⌘1)

Then save screenshot (keyboard shortcut: ⌘S).

Uncheck the option Debug > Optimize Rendering for Window Scale.

This will cause the saved screenshots to be in device resolution again, without requiring you to resize the device to the point where you can't see half of it.

You can download the iOS 9.0 or 8.4 Simulator and use it from within XCode 7.1. They save screenshots at the device's native resolution instead of the scaled resolution.

If you want to take screenshots for the iPad Pro (which only runs iOS 9.1), you're stuck having to change back to 100% scale each time. A keyboard shortcut for this is ⌘1, ⌘S, ⌘3