Apologies if you know this already, I'm not trying to talk down to you, just don't know how much technical knowledge you have in this area.
Perhaps an explanation of
why scaling is required would help clarify the issues.
As you may probably know, a PAL SD (standard definition) movie has a vertical resolution of 576 pixels, in the 'old days' of course these were known as
lines because each row was displayed by a single horizontal sweep of the electron gun, which was called a
raster scan line.
When you feed such a signal to an analog display (ie. CRT 'tube' TV or monitor) the image can be displayed by the set by adjusting timings so that the image fits the full screen; then if you change to, say, an NTSC movie which has only 480 lines the settings are changed so it too fills the screen.
The point here is that the technology allowed the screen to display a variable number of lines depending on the image it was receiving and (within reason) the electronics could change timings to adapt.
With a digital display like an LCD TV, plasma screen etc. the display has a fixed resolution (aka. 'native resolution'), typically 'hidef ready' displays may be 1280x720.
Now, what happens when you feed 1024x576 in that? Well, one thing may be that it's displayed in the centre of the panel with large black borders all round. That'd produce a perfect image but of course that's not why someone bought a 1280x720 TV.
So, in lieu of anything else the TV will contain a
scaler which takes the 1024x576 input signal and
scales is to 1280x720 (and since this is larger than the input the process is known as
up-scaling).
In doing this of course it has to 'create' pixels that aren't there in the original image to make up the numbers; this process is known as
interpolation and there are a large number of algorithms used in scalers whose quality differ widely.
Remember, scaling can't convert an SD image to HD because it's synthesising 'missing' information rather than revealing detail that is there but not visible in SD.
Now, if you feed most displays with a pre-scaled image the scaler inside the display will be effectively bypassed. It's also a fact that the scaler inside TVs, plasmas etc. is often not as good as can be found in upscaling DVD players (eg. Pioneer 868 or cheap ones like a Momitsu V880).
So, the basic answer to "why bother" is that the technology forces scaling, the only question is where it's done: DVD player, external scaler or display? The answer to that is which device contains the best scaler.
HTH.
edit: added important 'often' in last but one paragraphs.