A lot of out-of-copyright books like this were scanned in many years ago as part of Project Gutenberg. During the scanning process, things like this happen, since scanning is never perfect. You'll sometimes even see missing and incorrect letters, which is even more distracting for most people.

Spacing problems occasionally arise during the conversion to ePub, the file format supported in Stanza. Did you download "War and Peace" from the Stanza Online Catalog? By coincidence, I recently read the first few chapters of the version of "War and Peace" available from Feedbooks in the Online Catalog, and I didn't notice the phenomenon you are talking about. You might want to try reading that particular version instead.