I think the question is, setting aside TV upscaling, whether upscaling to 4K (via the upcoming RetroTINK 4K) and increasing the resolution by 24 times versus 480p or nine times versus 720p is a bigger difference than a raw 720p digital feed.
The RT 4K looks to be very, very good, so I don’t know that the question is necessarily as cut and dry as you say. Especially when official HD cables (the inputs to an upscaler) already produce an image that’s nearly as good.
The HD mod is certainly cheaper and easier to keep plugged in in a modern receiver, though.