It isn’t necessarily bad, it’s just an old way to handle low bandwidth. It sucks when video editing, but aside from when we see them when pausing (like your images), it’s very rare we actually notice (from personal experience, at least).

Most video playing apps have an option for this, I know VLC does.

It was a way of setting up video to save size while not sacrificing visual quality on old CRT TVs. Got left behind as it looks like this on more modern TVs.

So there are some exceptions to size being quality, and you've found the most obvious one. .ISO files are full copies of discs, including blank space or filler garbage data. So a DVD might only have a 1GB game on it, but the disc is 4GB, so the ISO is 4GB. Video discs are usually filled more "fully", but then there are also limitations with how the video can be encoded for DVD that tends to make the video files larger than they would be using more modern formats.

All that to say, if you aren't interested in the special features on a DVD, or the experience of switching virtuap discs, you're probably better off looking for the video files outside of an ISO file, if the ISO is of a DVD.

Blu-ray ISOs are closer to space effective, but it's still most effective to get just the video files.