Device constraints != screen constraints; it's been suggested an N810-size platform could handle a 5" screen, and an N800-size definitely could. You can make them even crisper than they are, you can make fonts smaller (although you can right now, too; resolution's not limiting on this at present) and in fact you can make gui elements smaller, at the cost of having to use the stylus; this is useful for ported apps. And there are too many things designed around pixel spacings (notably on the web) that would be usable fit to the N8x0 display's size, but demand more pixels. I think on a 5" screen, going as far as 1280x800 is the threshold of usefulness; anything over that probably won't help. But we're still way short of that.