What do you think cable/satellite HD is? It's just as bad.
Ironicly, the best quality "live" HD available is the over the air HD from you local broadcaster. When the over the air HD switch happened, I put up an antenna. When I toggled by TV between the FOX NFL game of the week on cable and over the air (exact same game/channel) I couldn't believe how much better the broadcast picture was than the cable picture. The cable company and taken the great over the air HD picture and compressed it down to junk (and this was "cable HD" I was paying extra for).
One of the reasons I dropped cable. Combine over the air with what is available on the internet (including Netflix) and I just couldn't justify the high cable TV costs.
IMO the netflix HD looks significantly worse than my FIOS HD package. Time Warner looks far better as well. Not to mention cable almost always has 5.1 sound now.
My main point is that streaming (or even over the air HD) can’t touch Blu-ray, which is why I consider the Blu-ray rental from Netflix to be their only real value.