Yes, techically HTML/CSS should be as scalable when used in a scalable way, but I'm not sure of current web browser situation. If someone has better info please reply.
Not on your life. Despite pretensions to the contrary, DPI has been completely meaningless on the screen for several decades. If you're writing an application, never pay attention to DPI metadata unless you're placing the item on a printed page, and never add DPI metadata to files unless they came from a scanner.
it will still be 1 inch when I print it out
This is true in an ideal setting. Unfortunately, there's a lot of shitheads out there that think '72 DPI' or '96 DPI' on files is meaningful because that's what the platform uses. I hope their heads fall off.
...and has an obnoxious dimensional limit of 5.08 meters on each side. It would have been so much better to be based on no units at all, just ratios or floats. Besides, the PDF viewer generally has no fucking idea what size your screen is.
Therefore my original claim that 1 inch is 1 inch on all properly configured readers still holds true
You're begging the question in the classical sense. Your original claim holds true given that you assume that it's true.
Nobody has their display resolution configured correctly in Acrobat except by accident or anal-retentiveness. I'd bet you $5 that it's not correctly set on your computer -- go ahead, zoom to "actual size" and hold a matching piece of paper up to the screen.
It's actually quite baffling that there isn't more noise about the insanity that 1 inch rarely is 1 inch
It's not 1984 anymore, noone gives a shit. Users rightly care more about being able to see what they're looking at than some hypothetical WYSIWYG benefit.
Actually if you set larger font to compensate screen resolution, it could wreck the hinting/scaling system in fonts, as the designer assumes that the characters are certain size. The letters are usually differently shaped at different sizes, and with highres screen you actually want those small-size shapes because they are optimized for small sizes.
edit: just to say, yes I fully agree that higher pixel pitch is definitely a good thing. I feel like displays are one of the most slowly advancing part of computers. Yes, they are getting bigger and bigger, but we are stuck on the same <100 PPI pixel pitch for large part of desktop LCD monitor history. At the same time mobile devices are having 300 PPI displays, and even laptops have higher pitched screens than desktops. Its just not fair!
Regarding screen size - the fonts are OK on my MBP too, but 27" is another story - you have to sit farther from such a huge screen. iCal and many other apps on my parents' iMac 24" are pretty much unusable because of tiny font sizes.
I am still on 10.4 though. One thing that bugs me is the size of the mouse cursor. It is too small for me -- I increase it and it all becomes jagged and ugly.