Well, the reason the crap quality wasn't noticed earlier is because a TV shows the data differently (and they knew this when they made the format, they knew it would be reasonable enough for TV).... it blends better and it will appear much better stretched than a PC monitor which is greater resolution at 800*600 than any normal pal or NTSC TV. pal=720*576 interlaced.
When it comes to PC the bare bare minimum these days is 800*600 to make it look good on high res monitors and 640*480 isn't terrible...
but 320*224 would never work on any monitor ever.