How many people will put their noses up against a print which is 2.6 metres tall/wide? I've seen a lot worse hanging on the walls of famous museums.
I agree, I've seen a lot worse. A few thoughts ... (OK, admittedly IMHO theories)
first,a lot more people will put their nose up to an image than you think ... at least approach it closer than the "ideal" viewing distance so as to notice the image falling apart. However, if examining the image close offers nothing they will only look a few seconds, and that may or may not lower their opinion of the image depending on it's over all strengths. Some images don't need micro detail to be successful, others absolutely depend on it. I've observed this watching people view images hanging in my shop as well as exhibits of mine an others.
second, (and this one is sort of theoretical) to me micro detail can be similar to harmonics in music ... on their own barely audible but take it away and the music suffers. A lot of people have really good distance vision because that's the goal of wearing glasses/contacts, so while they maybe can't "isolate" the micro detail from distance, it still affects the experience. (I hope to be able to test my theory some day )
But to me one thing often overlooked is you can't control theoretically optimum viewing distance once the image is displayed, and it is very possible viewing the image up close is something people can't help. If you have an eight foot pano on a wall in a hall thats only 4 or 5 feet wide, or even in a location with a lot of space, but traffic is stilled forced to pass by the image only a few feet away, then so much for theoretical viewing. If the image is mush up close (I see this everyday as customers want me to print 6 foot prints from their old 10mp images) it's mush.
Personally I think Jack nailed it ... a good capture can easily handle a 200% uprez. I don't know about the engineer from C1, but Adobe and others also know a thing or two, and the very nature and math of bicubic says you will get optimum results if you do things evenly. But then to throw another kink in the formula, I"ve gotten my best results by forcing an image to 360 or 720 dpi in Lightroom and letting LR and the printer driver handle all the math to get any size I want. I've adopted Jeff Schewe's workflow (of which I was at first somewhat skeptical)... if the image printed natively would yield over 360 dpi, I have LR force it to 720 and then turn Finest Detail on in the driver (to force the printer to actually print at 720 dpi). If it is close to or less than 360 I force it to 360. I no longer produce "to size" output files.