Also home computers have had RGB since the 8 bit era. Whether it's a BBC Micro, Amstrad CPC 464 (all released early 80s, all used RGB monitors and RGB cables) through to the IBM PCs with VGA cables. In fact anti-aliasing techniques for 3D games started out in the CRT era because even back then computer monitors were sharp enough to show a jagged line along the polygon edge.
I do agree that LCDs are sharper (and also worse for scaling) then CRTs and that RGB is sharper than composite; but it's still a fallacy to say the average 80s and 90s gamer didn't see pixels because they did.
Source: I used to write games on said machines as well as still being an avid retro gamer and collector (as it happens most of my consoles are still hooked up via composite to the same TVs that I've owned since the 90s. I'm more than happy to share photos if you want)
Pixels are absolutely visible when using a composite connection, however they are distinctly more fuzzy than if you use S-video or RGB or component video. The horizontal bleed is especially noticeable, which was deliberately used for transparency effects on consoles like the Sega Megadrive/Genesis, which couldn't do proper transparency in hardware.
I had several consoles hooked up to my composite/S-video/RGB capable CRT TV (in 240p, too), including a RetroPi hooked up via a HDMI->composite/S-video converter (before I got a proper SCART RGB module for my Pi3). The difference when switching the converter box from composite to S-video was profound, a very clear difference in sharpness and color quality. The difference from S-video to RGB was much smaller, but still noticeable.
These days I mostly play games on emulators on my PC, I don't really have room for a CRT TV anymore. I absolutely abhor all the pixel art scaling algorithms, I much prefer a gentle CRT-emulating fuzz (similar to a good RGB signal) and subtle scanlines, which seems to best replicate what the games look like on the actual CRT.
I was also there for the console boom from the C64 all the way up to the Xbox360, at which point I mostly lost interest. I have a background partially in electronics, including CRT TVs, and I used to work at a TV manufacturer during the CRT to LCD transition. So I'd like to think my credentials are in order.
I'm always looking for some subtle scanline filters, but most emulators seem to have way overdone scanlines for my liking.
And the vast majority of people hooked up the console with the included cables and never gave it any more thought. You're looking at the past through rose-colored console nerd glasses. And not all TVs with SCART were RGB capable.