The CGI wasn't rendered in that high of a resolution because they were using Amigas, and they figured it would be easier to re-render the CGI in whatever higher resolution became the standard down the line. No one expected the master files to be lost.
The master files were lost? What's the story behind that?
Does this mean Babylon 5 will never be released on Blu-Ray since it will be too costly to redo all the CGI?