If that's a still from a video then they're recording at a rather high resolution so likely some fairly good compression is being applied. All that being said I'm not entirely surprised at the quality.
A screenshot directly from the engine would have been perfect, but I'm happy to see
anything at this stage, so a slightly blury capture from a highly compressed video is fine by me.
If this video was shot using a camera pointed at the screen of the PC running the demo (could be, couldn't it?) rathter than a FRAPS-type capture, then that would explain the poor quality further. Cameras by their very nature don't capture a "pure" snapshot of the action so much as they capture all the action that occurs over the period of the exposure. That's why an action scene in a High-def movie looks great in motion, but blurry when paused.
Of course I'm still waiting to be able to download the rolling demo it came from
Scoob.