I wouldn't bet too much on "average joe" not noticing too much though. The average joe of today has come a long way in educating himself on technical differences. Now days, every phone is bought and compared by its resolution (and other spec-sheet numbers). Resolution is playing a big role in everyday devices, so I wouldn't bet on the average gaming public to be as ignorant when it comes to resolution differences on consoles as perhaps a couple of years ago.
That assumes resolution is important to them of course. Since you mention small devices used close to ones eyes, let's take the iPad Mini as an example. It's the lowest resolution of all the iPads, yet it outsells the others even though it's not "retina". That's probably because resolution isn't their #1 priority when making a purchase, even though they will be looking at the thing just 15 inches from their eyes.
Anyways given that most people don't read forums like this and that most game boxes will say 1080p on the back as will their tv's, I doubt most people will even know that they aren't playing a 1080p game. I certainly still see that with today's educated gamer. When I game it's from the couch with a 360 controller. As such people that don't know me well think I'm actually playing on an Xbox 360. Of course that's because they don't see the pc that is tucked away in the closet, and because they can't tell 1080p resolution even on my 65" screen that is just 10 feet away. They just can't see it. It's aggravating to me to be quite honest, to have such a large visual difference to me that seems to go unnoticed to others. I really don't understand it, but it is what it is.
I'm dealing with the same thing with one of my video camera's, the Sony NX30 that I sometimes use with a wide conversion lens, and it drives me nuts that the wide conversion lens adds some blur and resolution loss to the final image. Of course I show samples of this resolution loss and blur to others explaining why I'm trying to find a higher quality wide conversion lens, and by and large they think I'm mad. Somehow they just don't see the image degradation, something which to me is roughly as obvious as a punch in the head. But then I remember my dvd vs bluray tests that I did many years ago when many couldn't see the difference, and I remember forums like Beyond 3d where people went on about how 1080p on pc was a non visual improvement over the 720p of consoles, or how game x running on one console looks the same as the other console version even though one has blur and lower resolution, and then it becomes more clear. Yes, people often just can't see it, there's a limit to what they can perceive as an appreciable difference. While it may be aggravating to me and maybe to you or others, it's just the reality we have to deal with being 1%'ers when it comes to visuals and easily seeing the more minute differences.
Of course these same people that aggravate me when it comes to visuals likely feel the same way against me when it comes to audio. I'm really not sensitive to audio at all, and I have gotten stares of "wtf?" when I've heard two audio sources and thought them to be more or less the same. I guess that's karma for you.
