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You've grasped the issue. The details get distorted because there are no details. 72 dpi. is built for speed in loading web-pages, and anything above that is usually noted as "hi-res" or 1024 x 768 or some such arcana.
These days, you will often see some sort of link to the hi-res version of the picture, as the "thumbnail" will suffice to get the point across.
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