Just change the file extension from "PNG" (upper-case) to "png" (lower-case). I spent a couple of hours futzing around until I finally figured out that was the issue!
Note that screenshots taken with a physical iOS devices have "PNG" extension, and will never work until you change the extension. But screenshots taken on the iOS Simulator have extension "png" and work fine as is.
I've logged this in the Apple Bug Reporter as an XCode Usability issue: 17676619 Can't drag "PNG" to LaunchImages; only "png" works