And upscaling WVGA assets to WXGA will look good? And I'll be honest, not many good games on WP7.
Well, better than letterboxing or stretching the height of them to fit the screen. It's not just about games either, but that's the easiest example. There's a ton of WP7 apps that are completely abandoned and won't receive any updates. Depending on how the app was written, trying to use it on a different aspect ratio could be a problem (not so much for the ones that use standard Microsoft controls, I don't think, but more so for some of the more custom designs, and definitely for anything that uses XNA).
I'd much rather be able to scale evenly from the old 800x480 to avoid potential messiness going from 15:9 to 16:9. And as for the games not being good, well that's just your opinion.