It's a tradeodd between a blurry mess and a blocky one, basically. You've got in effect the same thing as 2D textures. A 2048x2048 texture will look far nicer when filling a 1920x1080 screen then a 512x512 texture. If you have a lower resolution texture, you can either render it point-sampled and maintain sharpness but render little squares, or interpolate it and generate blurring but break the low resolution look.
In this case, we're talking about a 1280x720 'texture' (frontbuffer) stretched across a certain sized screen. Let's pick 32" as there are 1080p and 720p sets of that size. You either have larger pixels at 720p, or a 1280x720 pixel image rendered at 1080p with or without some 'texture filtering' in effect. The better looking really depends on how far you are from the sets. If you're really close (or have a huge screen), the visible pixels may be annoying like pixelated textures are. But you may also prefer the sharpness over the blurring of an upscaled image.
Still, considering the popularity of texture filtering, I think it goes to show that people prefer some upscaling method over pixel resizing. Which means if your going to stretch the image over a huge screen, you'd probably want some upscaling method rather than just rendering larger pixels.