> Arcade laserdiscs are analog video in NTSC format. That means that 480I (640x480 > interlaced) is the limit of the detail you can get out of it, and in practice it was > probably a bit lower.
Not to mention that there's info in the VBI that also needs to be encoded, saved, and decoded at playback time.
Aaron himself wrote about this nearly a decade ago, and while it's entirely possible that things have changed in that time, I believe that the basic issue still remains:
But I have no idea how things progressed past that point; other than some minor side interest in DEXTER, I haven't really been keeping up with the technical side of what's happening with it for the past few years. It's a format that's beyond dead, unfortunately, and disc rot is making 'ideal' preservation efforts increasingly-impossible as time drags on.
For the original poster: take a look at Aaron's 'About Laserdiscs' series. There's some good info in there not only about how the format works, but also regarding the challenges faced when attempting to preserve the data that it holds.