That's only true for PC games, where monitors did indeed produce blocky pixels. Arcade, console and early computer games that connected to TVs were designed to take advantage of the "deficiencies" of those screens to produce smoothed images, or the illusion of more colours than the systems were capable of, among other effects. So if you want to play those games as they were meant to be, you either output directly (without any upscaling or filters) to an old CRT TV, or you use those NTSC filters or shaders that most emulators have that try to mimic (to various degrees of success) the way an old TV displays images.
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I disagree, and so do most/all retro gamers nowadays. The golden standard back then were the standard res RGB monitors that arcade games used. Consumer TVs in America at best had composite input and paled terribly in comparison. But we all dreamed of our games looking as crisp as they do in the arcade. Even the NES had an arcade counterpart where you could experience NES games in crisp, beautiful RGB.
Standard res RGB monitors are not as crisp as PC monitors. But they are still quite nice and really do let the individual pixels shine through.
Most retro gamers now typically hook up their consoles via SCART to a CRT that accepts pure RGB, typically a Sony PVM. I've got all my consoles and my arcade boards running on a PVM and can really easily see the pixels making up the art.
here's a few examples I grabbed off the web: http://imgur.com/a/GXHyf They look even better in person.
Yeah most emulators provide filters that give you scan lines and all that jazz (none of them look quite right). And of course an RGB monitor does not look at all like an old game running in a modern emulator with no filters. But I would still definitely say you can see and appreciate each individual pixel.