We chose this resolution as a balance to get pixels that aren’t visible at typical viewing distances while still getting good battery life. I use 1.5x scaling, which results in useful screen real estate, but does depend on good OS and application support for non-integer scaling. In practice, it works well in everything I’ve thrown at it in Win10 and most of what I have tried in Ubuntu 20.04.
We don’t currently have plans for alternate displays, but we’ve designed the display to be easy to replace and the display connector on the mainboard to be able to support a broader range of possible displays. It’s unlikely we would go lower resolution in this form factor, but I agree there could be an interesting case for a display resolution that works at 2x scaling (at the tradeoff of battery life).