720p is one of the formal definitions of HD video as determined by the group overseeing the standard. It is the MINIMUM standard to be considered HD.
1080p would be considered the MAXIMUM standard, though 1080i is actually the other HD standard as originally conceived.
Even though there are already higher (video resolution) standards in relatively advanced stages of development around the world, 1080p is likely to be the max U.S. standard for home video for a very long time to come (I would bet at least a decade).
Thus, while Apple can squeak by by claiming 720p as HD, and while Apple fans can justify it by various arguments/rationale because whatever Apple says is THE best way for everyone, it sure would be nice for Apple to deliver a relatively future proof hardware standard of (IMO) 1080p 60fps hardware. Then, let all the rest (national bandwidth issues, content for the iTunes store, blah, blah, blah) catch up to that capability over time. Apple can't fully crush the "bag of hurt" if their alternative is capped out at a limited incarnation of 720p. The quality-minded people won't accept the tradeoff.