1080p is native resolution of standard HD TV. It not some random number that is cooked up
Any resolution below the native resolution, up scaling occurs. Any upscaling affects image quality as the missing pixels are interpolated. Its just the way computer graphics works.
However it is not wrong to say something gonna give to achieve a game that can run will at higher resolution & also runs & look well.
The fact that many games struggled to even have consistent 30fps at 1080p, even some at 900p is quite a disappointment for next gen console. Obviously gameplay matters, but with new generation, comes higher expectation, & expect games to display at 1080p is hardly a unrealistic expectation since PC games have been doing it for years, & its pretty much the standard for TV & movies.
Of course, now we know next gen system ain't all that powerful, so something gonna give. I take lower res, or less effects for better smoothness for sure. But not because I think 1080p is BS, but when the hardware can't handled, what choice do you have? You just have to choose the next best setting.
Considering the gen is still early, & already struggling, these hardwares will not age well at all, especially with price of TV dropping so much, & more people upgrading to bigger screen. I bought my 40" for 700€ in 2011, now you can get 60" for this price or even lower.