Whatever the uses of interpolation are for the internal proceses of game engines, interpolating the whole frame to bump up the resolution will inflict the image quality and presentation of a game. Scaling operations reduce the quality of the visuals and I have nothing but wonder that you are defending a practice that means muddened, less precise images.
I like my games to be crispy not blurred out pixel soup. But hey, these days and age blur filters pass off as AA, people are swallowing everything.