1280x800 on 7" is a very high resolution, it will make everything look tiny. I think what parent was referring to is that the OS doesn't scale the text and UI elements, like the new iPad does. The new iPad has a 2048x1536 screen, but the UI looks like it's 1024x768, it's simply twice as sharp.
I have very bad eyesight, looking at the tiny UI in the screenshots on Google's tablet page made me cringe. I wouldn't be able to work with a tablet like that. I had the same problem with the MacBook Air 11", which has a resolution of 1366x768.
Android OS scales items to match the density of the device. Also, you can adjust text size via the accessibility or display settings as of 4.0 (there may be an accessibility option on older device but that is inconsistent).
