If manufacturing defects are distributed randomly per unit area (as they often are), then the smaller the area the greater the chance of having a defect-free screen. Thus 1600x1200 is easier to produce at high yields than 1600x1200 on a 17" or 19" screen.
Even if a 15" screen can do 1600x1200, it would give itsy bitsy text. ;-)
The A31P is certainly a very nice box.
I can't see how it's even possible to "overinterpolate". Characters would look horrible.
It's just a matter of having the electronics have a higher bandwidth than the physical pixel grid on the screen. It was quite common for early 15" monitors to quote maximum resolutions above 1024x768 with 0.28 to 0.32 mm dot pitches - they could physically display the stuff, but as you say it would look very bad because there would be more than one pixel of information displayed on each physical phosphor pixel - a no-no for sharp images.
Cheers,
Scott.