It seems you are misunderstanding streams. A stream is a pointer to a position in a file you can read from or write to. If you are you are using a photo chooser then the result will give you a stream to the file. You need to read the bytes from that at stream and save then you your local storage. Then you can access the image from there.
In my Live Countdown app I use the WriteableBitmap class to save the Jpeg to a stream. Something along the lines of this:
var store =
System.IO.IsolatedStorage.IsolatedStorageFile.GetUserStoreForApplication();
var newPath = "MyFileName.png";
if (store.FileExists(newPath)) store.DeleteFile(newPath);
var stream = store.CreateFile(newPath);
BitmapImage i = new BitmapImage();
i.SetSource(photoResult.ChosenPhoto);
WriteableBitmap imageToSave = new WriteableBitmap(i);
imageToSave.SaveJpeg(stream, 173, 173, 0, 100);
stream.Flush();
stream.Close();
That is kind of the flow. I had to take parts from different functions and put them together as the app allows the user to scale the app first. There is scaling the SaveJpeg method parameters as I am saving the image for a tile.