I agree. It reminds me of back when I had my first mp3 player (a 32 megabyte diamond Rio) and I would try to fit a whole CD on it by compressing the HELL out of the music.
If anyone has an idea for a fix for this, I would love to hear it. I understand it being compressed if I'm receiving video via the internet, but I'm getting the audio quality issue over my wifi network to my iPad.