It's not just that. Many modern games are simply not designed for low resolution. 1080p is the barely minimum for them and higher resolutions would be even better.

There will be too many objects on screen. When u shrink it to 720p, it's simply not viable anymore as the objects and textures have too few pixels to represent.

Sounds like more of a game problem. The screen is about 200dpi which is pretty good. As more games test on the deck that should improve. I tried playing some steam board games on there, the text is readable but on a small screen it's not a good experience. It worked well with an external screen.

It's a tradeoff between cost, performance, portability, battery life and resolution. They've done a nice job in my opinion.

I've been experimenting with streaming to my deck from my PC, rendering at 1440p. Compression artifacts aside, it looks quite good.