Steam Deck is also only an 800p screen, so using DLSS/FSR will render the game even lower than that. Basically the upscaling just works better at higher resolutions since it has more data to use. And like you said, definitely better for farther viewing distances too.
As far as I'm concerned, RAGE is a modern game. It even looks and plays like a modern game, so it can't really be retro.
To call it retro is like saying League of Legends is retro because it came out in 2009.