I had a tf101 before this with identical screen size and resolution and now I have the note 10.1 and I have had zero issues reading even pretty small text. I use it to read research papers and textbooks all the time.

I have tried higher resolution displays, including full HD and "retina" ones, and, personally, it makes very little difference for me. The displays are very sharp, but displays like that on the note 10.1 are perfectly sufficient for everything I've thrown at it, including 720p movies.

Don't worry about the display resolution, it is fine.