the photostream can be accessed from all your apple gadgets and is useful if like me, you snap on what is handy, phone or ipad, them want to edit it or send it off your computer. The camera roll is only on the bit of kit you took the photo on. Also the photostream sits on icloud so you still have your photos if you lose the gadget you took them on.
Photostream is for sharing your photos with other devices via iCloud.
At the moment your settings are putting all your camera roll into Photostream
Go into settings/Photo & camera and turn off My Photo Stream