^As various others have explained, you have to factor in 3 parameters: the screen size, the watching distance and the resolution. Only from those 3 you get the apparent angular size of the single pixel, which is the absolute parameter that can be compared to your eye optical resolution.
In other words, it's perfectly possible that 720p an 1080p look completely identical to you on a 20" screen, depending on the distance. On the other hand, saying that 720p looks better than 1080p makes little sense, unless your screen is simply downscaling the 1080p to a lower native resolution and is not very good at that :)