Something that's been skirted in this discussion is the idea that the whole point of a windowing environment is that no one application takes all of the resources - they share the screen, so whatever the screen's maximum resolution is, any given app should take _less_ than that for it's standard resolution.
That's been something that's frustrated me. We have this ideal of multiple working windows, but unless you're on some super-pricey graphics workstation you're usually reduced to maximizing each application in turn to make the most of your resources.