If your hardware is good enough to do it without stuttering, without pausing, without de-synching the audio, and without any artifacting, then sure, there's no visible difference. Still, even if this is the case, you've gotta admit the machine is doing lots more work under the hood, for absolutely no profit on the screen.

In a sense, I suppose you're right. I'm an Anime addict, so the videos I tend to view on my phone are mostly selections from my library of DVDs. I'll load a season of 24 episodes onto my computer, queue them up in Handbrake, and let the machine run overnight. I don't mind at all the cost of creating and storing "mobile" versions of my video library.

For me, the only video I want to watch in high quality are those that I want to play again and again. If you're just interested in watching some Youtube video that you'll look at once and never worry about again, why bother watching it in HD at all? Low resolution is fine for junk video...