Except that Game Boy games didn't look like that screenshot either. The point being that programmers and artists took advantage of the screens (be it a handheld LCD or CRT television) to compliment their artwork and achieve effects they couldn't pull off by their pixels alone.

One can see a Cg shader here that attempts to recreate the look of an actual Game Boy screen, complete with several characteristics including motion blur and contrast settings:

http://filthypants.blogspot.com/2013/04/customizing-harlequi...