The problem is not whether the upscaled signal contains enough information to reconstruct the original. The problem is that the resulting upscale looks like crap because it's blurry, because here in the material world pixels sometimes really are little squares. No one cares if the source is bad MPEG, but if the source is a computer it's inexcusable to look bad like that, and bugzilla tends to let you know when people think your software is inexcusable.