My guess is the poor quality is a result of heavy compression. That's so that lower-range usb drives can be supported without getting frame drops, tearing, etc on the video... but also to make the files as small as possible when Tesla's AP engineers "query" the fleet for videos of certain scenarios. They're sending the video/still output of those "queries" back up to Tesla HQ with LTE they pay for so makes the most sense for them to compress the heck out of it to keep their internet bill and cloud/server/storage requirements lower