To be honest, I completely disagree. The whole benefit of a high PPI screen is that you have trouble seeing individual pixels - Things look "smooth" vs "chunky".
I have a N770 with its 4.x" screen, and my N900. Do things look sharper on the N900? Heck yea. Which would I prefer? My N900's screen definitely.
I have a ~100ppi 23" desktop screen(1920x1080), and at a distance of 18" or so, I can see individual pixels clearly; a single pixel out of place on a font looks bad, and if something's spaced slightly off its easily noticeable.
I have a bit better, 15" laptop screen that's 1680x1050(Not sure PPI, but its higher). Its significantly sharper than my desktop screen, and I have to have it around 12" from my face to see individual pixels.

My N900 is even better - I really have to strain to see individual pixels, and AA on games isn't even really required for it to appear sharp and clear; On my desktop screen, 4XAA is required for a game to look good. On my laptop, 2X is sort of required.

Personally, I'd love to see a 24" screen with like 3840x2160 - Pixels would be extremely small, and anti-aliased fonts would still look sharp and easy to read. However, that would require dual-link DVI for 60hz, and I doubt its even realistically possible until really cheap OLED tech becomes standard.

If you'd ever played a 640x480 video on your N900, you'd realize that this isn't correct. You end up with around a half-inch of extra pixels, and it's definitely noticeable, even holding it at arm's length.

So, in conclusion, I completely disagree, and don't think you know what you know what you are talking about.