I remember that it looked like that, by default, 10 years ago. It can be customized very easily and comes with a few different themes out of the box, you can add your own. It has had tabs for a while.

The default terminal in linux used to be quite ugly as well, seems unfair to compare the defaults from years ago to the current status in either.

I came to OS X in 2006 (grad school, prior laptop had just kicked the bucket, a new battery was a couple hundred, and it was dog slow anyways being a ~2003 laptop three years later (hardware moved much faster back then)). So that was OS X 10.4. Terminal.app suited me just fine. The default was indeed ugly, but that was quickly remedied. I don't recall when they got tabs, but as a screen (now tmux) guy, that never bothered me. I've personally never understood the desire for multiple tabs when a better solution existed that didn't take up big chunks of your (especially on a laptop) limited screen real estate.

Launch an XTerm and you can see how awful terminals can truly be.

I usually use iTerm, but I just opened Terminal and it looks like this:

http://i.imgur.com/JPSgL9K.png

contrast: perfect

font: pretty good

anti-aliased: yes

size: not way too small

tabs: yes

Really, the only reason I use iTerm instead of Terminal is because TotalTerminal dropped support for newer versions of macOS.

It's quite easy to customise. A lot of people's complaints are along the lines of "no bookmarks manager", but while not UI-friendly, ~/.ssh/config is as powerful as it gets.