First, A picture is a LOT different than video.
you can't get nearly as much quality as in video as in picture without driving up the file size a ton.
Thats a big reason the quality isn't great; so it doesn't use much tape.
They COULD buy a very high quality security cam that is on the market. But like DewDew said, they don't want to spend the money.

In regards to CSI's representation of digital enhancement.

Lol no.

Photographic enhancement yes

With a negative you can make it microscopic or bow it up to the size of a bill board as photons are much more detailed than pixels.

With a digital camera, first you have your raw format, which compresses the image to pixel data.
(A digital picture can be summarized as, A brief summery of what the camera has seen.
Where as a standard SLR with a film is a much more detailed summery of what is in the frame.)

If I have a picture with a nub plate about 10 Pixels across. and I blow it up to the extent that its 1000 pixels across then what I get is 10 huge ass pixels with gradation.

Check out what these cameras can do. Gallery is a must see.
http://www.gigapxl.org/