Don’t think it is your mind playing tricks on you. In some ways, things DID look better back in the days. When hooked up to old worn-down TV’s with yesteryears technology, usually by means of a coaxial cable, the video output of the old home computers was severely degraded. Today, we wouldn’t find that image quality anywhere near acceptable, but back then it was the norm. And the weird thing is, in some ways it made the graphics look better than it really was.
The example images in the link above give me some serious, dizzy, nostalgia.