Is the HD quality of today really getting worse

I have no idea. All I know is the higher the resolution, the better the PQ, right?

Yes, but it depends on viewing distance. At some point, as super high resolution video would be too much. Because in order to view the picture you'd have to sit so close that you'd be closer to the center of the screen and the edges of the screen would be far away. This is why Omni theaters wrap around you.

Vice versa, if you sit too far away, you're eye can't make out the difference. 720p vs 1080i has nothing to do with screen size. You can see the difference on any size screen, you just might have to be really close in order to do so...
 
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