The main difference is graphics vs text. While bitmaps won't profit from a better resolution, text will. Sharper letters, no more blurring around the edges. It's a big difference in readability.
No, there NOT an appreciable difference in readability of Latin alphabet above 400 DPI, and 300 when a subpixel rendering technology is used. Unless they're doing careful side-by-side comparisons, test subjects need better than 20/20 vision to notice any major improvement over 300 DPI.
The truth is battery life and game performance take a huge hit, so the manufactures can put a bigger number on their spec sheet. The consumer is the loser of this idiotic DPI race.
