The axle has to tighten down and be torqued to spec on the wheel assembly, the easiest way to clamp the "head" end for torquing is to clamp it into the fork. It looks like you have some free axle, and you could slide the axle back and forth in the wheel as it is in the picture. If that's the case, something is disastrously wrong. I don't know what bike you have, but it looks like you have no spacer on the non-speedo side. There has to be a spacer that fits into the oil seal on the bearing retainer, if it's there it should stick out more than it does I think. If it is in there, the only way it could push in too far is if the inner spacer collar is missing or too short.