I was upset at first too, but when I thought about it more, I think this was a conscious decision to do so. If you think about it, "The Shield" has always had a gritty, almost voyeuristic film to it. I think they felt that if they converted it to an HD format with 16:9 and "clean" film, that it would hurt the stylings of the show. Also, I have to say that it seemed like maybe part of it was filmed in HD, or at least in a higher resolution, because the film seemed to look "extra" gritty in this episode.