It's not just a matter of can or can't do...my 17" LCD can perfectly do 1280x1024 (in fact I use it in some games like The Sims 3 when PC can handle it), but it's simply too small for me. And I have great eye vision but I'm not the only one who uses this PC, my parents have bad eye vision, so switching to 1280 is out of the question
Zooming out works too...but it's still too small 








