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The problem is that the cable compaines recompress the digital HD signal to save bandwidth. Even if they're keeping the full 1920x1080 resolution, they recompress it at a lower bit rate than what you get over the air. Recompressing MPEG is a bad idea and introuduces more artifacts. Cutting the bit rate makes this bad situation even worse. It's like converting a 160 kbit MP3 to a CD and then back to a 128 kbit MP3. The result is worse than if you had gone straight from an original CD to a 128 kbit MP3.
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