You have never seen apps fly to pieces at higher resolutions on Android? I have, and the worst part is that it is often the better apps. For example, Chuzzle is downright unusable on both a Nook Color and a Xoom without the Zoom trick. The interface is all over the place. Everything from ESPN is pretty bad about that, as are many higher-end games (they will only fill part of the screen with a black border).
Now a surprising number of apps just work at higher res with obvious stretching that looks bad but at least fill the screen. A few apps even work well at HD resolutions, notable the Tegra apps (which is a duh).
But for many people many apps they depend on are the kind that breaks at higher resolutions. My friend's bank's app flies to pieces at native res on his Xoom, without the Zoom feature it would be unusable. It is obvious that the Zoom feature is Google's solution to the problem of fragmented resolutions on Android.
The only problem is WVGA apps Zoomed to be HD resolution look terrible. Functional, but ascetically terrible.