Note that even though standard tv is 720x480, unless you have a good over the air reception, you probably never see it. Cable is compressed in most areas also. The cable companies digitize and compress the locals, send them over their fiber backbones then a local box in the neighborhood converts it back to analog for the non digital stations. This gives a far better picture than trying to amplify and spit the signal over and over from the cable company to the home.
DVD is highly compressed also, but most studios work for weeks to get a great picture, they hand sequence some frames even to try to eliminate as many artifacts as possible.
The compressors that Dish (and the cable companies) have to use have to do it in real time. No chance to superoptimize the compression. Compression hardware has significantly improved over the years, allowing them to put more channels on the same transponder.
HDTV is also compresses, but the bit rate is much higher so fewer artifacts.