Joshua Ho writes for AnandTech about when an increase in mobile device pixel density provides no further benefits for its user. Considering some of the tradeoffs inherent in a system comprised of the human visual system and a mobile device, he concludes that screens with a resolution of around 90-100 pixels per degree are a good compromise for typical, RGB-pattern LCD screens.
Ho arrives at his conclusion through a discussion of visual acuity studies. I don’t disagree with him, at least when talking about text and images consisting of simple geometry. More complex static images and videos are different animals, of course.
The human visual system is extremely complex and delving into its complexities are well outside the scope of his (and this) article. That said, I just happen to know about research where a panel of viewers subjectively rated video quality on many different devices, including high and low DPI devices. One of the findings was that viewers judged video quality on both high and low DPI devices (each with the exact same screen size—an iPhone 4 and an iPod Touch) to be statistically similar.
Put differently, a theoretical video service provider could send a 480x320 pixel video to a device with a 960x640 pixel screen and the theoretical viewer would be just as happy as if the service provider had sent a 960x640 pixel video.
In terms of this discussion, high DPI mobile devices passed the point of diminishing returns where video is concerned long ago.