We were fine watching movies on VHS tapes and small CRT TVs, but watching a high-quality encoding on a 4k TV is much better.
I think there's a bit of rose tinted glasses going on with our memories of SD TV, too. A decade or so ago I plugged an old PS2 into my 50" plasma TV (which I bought just after plasma TVs got suddenly cheap :D ) and then spent a good 10-15 minutes trying to find a setting to increase the resolution before realising that, no, that's just how things looked back then, except now it's magnified so it's really blurry.
Analog on the order of 480i60 is a good bit different from even digital 640x480p60.
However it's a lossy compression of sorts, and the transform is of a different nature than we're now used to estimating for digital codecs.