Progressive scanning keeps things fairly sharp - general consensus is you need to be around an inch from the screen to see a major difference between 720p and 1080p.
But that's not the point. Microsoft and Apple by default assume the display works at 96 pixels per inch - which at 1280x720 means the displayed image is only 15.3" diagonally. You're stretching that image over more than double that
In contrast, my 24" monitor runs at 1980x1200 - which at 96ppi means the image is 23.6". So whilst my main screen is running at virtually 1:1, yours is running at 1:2.4. It's like get a photo enlarged - you don't lose any detail, but because everything is bigger, any lack of detail is far more obvious. By having a screen that big with the same resolution as a 17" monitor, all you do is dilute the detail that's already there - you can't display any more, you just stretch out what you've got over 4 times the area. Then, to make it look as good as a screen half the size, you have to put it as least twice as far away.
Steve