Hah, those aren't low res. The official online instructions for some of the older sets (think mid 00s) are low res enough that it can interfere with reading them. Once you get old enough, they shift from "generated from pre-press digital files at too low a res" to "scans of actual paper" and become more usable again.I also hate the "find alternative model building instructions online as a low-res PDF!" thing.
I think Lego is stuck here. Higher res bitmaps would make the files huge (and the current larger set instructions are already huge at the current resolution, like the A model book for 10497 is 185MB), and going to vector art would fix the resolution and probably be smaller, but at the price of taking 10s or more just to render each page (when you do complex vector, Acrobat isn't a pig, it's a dead pig, uphill, in the middle of winter, in a three-piece concrete suit). The app doesn't help most of the time, either, since it usually only offers the PDF instructions for even kid-oriented sets above 300ish pieces.
My understanding is that the instruction expansion is a conscious one, with Lego (even for the 18+ sets) wanting to make sure that kids won't get lost (even though we didn't get lost back in the day). Even now, the higher age group set instructions will show stuff like "2x of this part", while the younger age group set instructions will instead show the same part twice.I feel like the paper booklets are needlessly inefficient in a lot of places where they basically spend two pages showing you how to connect 3 bricks. Probably automated step generation instead of done by a squishy with some forethought. If I'm right they could probably squeeze two models per booklet in by just being a little more clever with the instruction steps.
Reading between the lines a bit (as in the guidance for instructions for the BrickLink Designer Program, which is really meant for adults only, not just "18+ isn't really serious" "Adult" sets), it sounds like their current intent is to limit each step to around 12 studs worth of pieces maximum. For comparison's sake, looking at ye really old 497/928 instructions, over half the steps involve at least 12 pieces per. They're also no longer scattering new pieces in a single step over the entire model (they're limited to one area now).
One other thing that has definitely changed versus the old days is that sub-assemblies used to have a single "parts needed" listing at the beginning of the sub-assembly instructions, but now each step of the sub-assembly instructions has its own dedicated "parts needed" listing.
As far as instruction generation, I'm pretty sure Lego's building instructions team does each step manually (graphics are auto-rendered, of course). They may use auto-checking for verification, but they don't auto-generate the steps and then call it done.