It's often not the UIs, it's that games are so visually dense now (foliage, hair, texture detail, draw distances, small animations everywhere, effects that are heavy on particles and transparency) that lower resolutions don't work anymore. I first noticed this during the last gen, watching a relatively low-res video of a then upcoming Forza Horizon game. It was almost impossible to tell what was happening on screen. Granted, compression was also doing its part, but much of it was due to there simply not being enough pixels to display what the developers wanted players to see.

I have also noticed this with some titles on the Steam Deck, which has a display resolution of 1280x800, so effectively 720p with a bit more vertical space. There are games that aren't all that enjoyable at this resolution. There's a reason why most competitors in the handheld gaming space chose to use 1080p or higher res screens, even though the can be a challenge to drive with mobile chipsets, but Valve's handheld is old enough that upscaling that makes higher resolutions possible wasn't as mature yet.

If you look at improvements to all major upscalers on the market (FSR, DLSS, XeSS and PSSR), they have pretty much universally become better at preserving fine detail, even to the point of giving up a bit of performance for this. They are designed for modern games, after all.

There are still plenty out there that more or less work at lower resolutions, like most e-sports and F2P titles (which also have tend to have low hardware requirements in general). We have reached the point where even reasonably decent integrated GPUs can play fairly recent games at 1080p or thereabouts. 1080p has been the minimum for years at this point, which is also reflected in hardware requirements, where 1080p/30 at low settings is often either directly stated or implied for minimum requirements; more recently, it's admittedly quite often with upscaling, but that's a relatively new development, years after 1080p had become standard.

Keep in mind that 720p as a resolution standard is positively ancient at this point. This was usually the target resolution during the Xbox 360/PS3 era (although there were plenty of titles that ran at lower resolutions, as well as a few that pushed up to 1080p), which started 21 years ago. Even four years prior, I was already playing games at 1280x1024 on PC. It's not outrageous for developers to move on from this, which the overwhelming majority did with the last console generation, at the latest.