If the axle were too long, you would NEVER get that knuckle attached to all 3 points (LCA, UCA and radius arm. It triangulates the position for a reason, so that it is in the same place for a given suspension position every time..otherwise an alignment would be pointless. That axle can slide in and out up to 2 inches or so on the inner joint to allow for suspension compression and steering angles. If that wheel is sitting back like that it has to do with one of the three mounting points, either your crossmember is bent/broken or the uca is in the same condition OR the most obvious and noticeable one is the radius arm is too long/the crossmember/front end is bent/broken and pushed back.

Jack the car up and unbolt the two bolts (for the radius arm) on the lower control arm, then move the wheel into the normal position in the wheel well and see how much longer that radius arm is.