Maybe it's just me, but I don't need more than 1080p resolution for watching a video. I don't recall the exact numbers, but I think you need to be within 5 feet of a typical 42" screen to notice an improvement of 4k over 1080p. That's bit close for my taste! Now if you have some kind of enormous video setup that would benefit, then more power to you.
People would either need bigger TVs and/or to sit closer. It's the same with 1080p vs. 720p.
Ironically, I might be better able to make use of 4k video on a computer since I sit so close. I find video to be a bit soft on the iPad 3 and Retina Macbook Pro because both have to up-convert 1080p video. I expect to have a 4k or so 27-inch monitor in a few years, and would love to be able to watch native video on it.
I would need to both sit much closer and need a bigger TV to make use of 4k video. I still have a 720p plasma because where my couch is, it's almost impossible to tell the difference between 720p and 1080p.
Some of the detail may have been lost in the compression and some in the upconversion so better source compression and better upconversion may help a lot although more resolution is always nicer.
Yeah, I understand why movie theaters are interested in 5k, but I don't think most people will be able to see the difference on home televisions.
Not that that will stop them from making them, but it'll be interesting to see what happens after 4k/5k when the limit of how much resolution the human eye can perceive has been surpassed.
Marginal improvements in apparent resolution aren't the only thing that a more efficient codecs can deliver. The same capacity can also be used to increase the bitrate of the encoded files dramatically, and / or deliver streams at much higher frame rates. In terms of improving picture quality, jacking up these aspects while keeping resolution at less than the supported maximum can be far more effective places to spend your bit budget.
I have recently acquired weak glasses (0.25). I wear them when I'm watching good HD sources and take them off if there were significant artefacts or low res source as they are better slightly blurred and there is the comfort benefit.
I do care about video quality although I know that I'm in the minority (many people say that picture quality is the most important thing in a TV but very few of them can actually identify it). Given that my very weak prescription makes such a difference (720P and 1080P content is probably the same without my glasses) it wouldn't surprise me if many people really couldn't see it.
EDIT: I found an article on the subject: http://carltonbale.com/1080p-does-matter/