Product improvement has nothing to do with it.

For this situation to represent improvement would require that a work be produced (first recorded) in a low-definition format, then somehow a higher-definition version comes into existence.

That would violate the laws of information theory just as egregiously as a perpetual motion machine violates the laws of physics.

The true situation is that vendors choose to make renderings from a master at strategic resolutions that they sell into different markets, segmenting their product lines in such a way as to maximize revenue squeezed from the consumer. Think of the product matrix as working something like the game of go, where an arrangment of products, or lack of products, can block a consumer's wishes and force him to spend more money. In this case the strategic gap is lack of downloadable 1080 videos, forcing people to buy lower rez versions for some devices, and buy blu ray a second time to get 1080 for home entertainement devices.

A clear illustration of that strategy is the way that Amazon restricts downloadable video to 720 except for a privileged few who purchase hardware devices licensed to work with Amazon Video. Those lucky bastards get 1080 for the same price I pay for 720.

There's no technical reason why all Amazon customers can't have 1080. They just choose to sell it only to a few.

This isn't like successive generations of recording technology. Not like going from digital studio recordings to analog vinyl albums, then later going from digital masters to digital CDs, then again going from digital masters to MP3s. It's not a White Album. situation, happening over time, it's happening all at once and is a matter of strategic choices by those doing the rendering. It's not technological advancement that's behind this.

You have such an innocently Pollyanish view of business, Tom. Can you really not imagine a business playing hardball to maximize profit?