Zinio is basically just scans of printed magazines. The text is still pictures, so naturally, it'll look like crap. (Some publishers provide Zinio with a digital file, but they're still low-res printouts designed for screens.)
Zinio may update the app, but unless they go and rescan all of their content at higher dpi, or get the publishers to provide higher quality files, the magazines will still look awful.
The Wall Street Journal reader is the same way - they seem to be using text specifically selected for the iPad 1/2 screen rather than the native scaling and as a result, the menu text is smooth as silk but the article text is blocky, pixelated and fuzzy. Hopefully this will be fixed shortly, it's actually fairly noticeable - it makes the reader actually look worse on the iPad 3 than it did on the 2 I think.
It looks like the app has been updated.
Yep, much improved! Much nicer on the new iPad...
I am still having the blocking effect.