If you've ever noticed that your vintage games look horrible on your top-of-the-line 1080p LCD TV, you aren't hallucinating. An NFG forums member has assembled a fantastic, in-depth explanation for this ugly phenomenon.
I'll spare you too many technical details, but the main issue at hand is resizing. CRT screens are capable of scaling hard-edged, necessarily proportional images—like old game sprites—more gracefully and convincingly than LCD or plasma screens, because they aren't displaying on a fixed grid of pixels. Resizing or stretching an image doesn't require a new set of pixels to be illuminated, as is the case with more modern display technologies. More importantly, early consoles were providing an image that was optimised for consumer CRTs, so "resampling" (technically not the right word for the process, but you get the idea) wasn't necessary.
A modern fixed-pixel screen with a high resolution has to somehow resize the image to fit on its grid, because nobody wants to play a 4-inch games of A Boy and His Blob on a 52-inch flat screen. One option is resampling, which is essentially the same thing you do when you resize an image in Photoshop. This is fine for some images, but renders hard-edged pixel art as a blurry mess. The other option is hard-scaling, which preserves edge fidelity by simply multiplying rows and columns until the image is the right size, leaving you with an often ugly approximation of the meticulously-drawn sprites that gave early console games such a distinctive aesthetic. So there you go. [NFG via Kotaku]