It's to do with the connection between the AES/MVS and the TV/Monitor.
The TV should be similar in quality to an arcade monitor although the quality of the components will vary between manufacturers. The problem is the if you are using a composite (yellow) cable to connect to the TV. Analogue video is made from three colours, Red, Green and Blue or RGB. The best quality would be getting an RGB signal from the console to the TV.
In an arcade machine, the arcade game pcb outputs an RGB on three separate wires. One for Red, one for Green and one for Blue. These three wires (plus the separate sync wires) are sent separately and connect to the arcade monitor directly so no drop in signal quality.
A composite signal has to send all three colours plus the sync signals along one wire meaning that you lose a lot of information and therefore quality.
S-Video is slightly better because it splits some of the composite signal into another wire but all colours still get sent on the same wire within the s-video cable.
What you want is a TV that accepts an RGB input. In the UK and the rest of Europe we had a connection called SCART which has pins that accept an RGB signal providing that you send the correct voltage along the scart cable. I've connected a PAC-MAN pcb to a SCART TV successfully and it looks great. I'm not sure how easy it is to get hold of SCART TV in the USA and Canada though. Alternatively old broadcast monitors usually accept an RGB signal.