It seems consoles only "upscale" to the 720p or 1080p in the game that "have" 720p and 1080p on the Xbox at least. Not sure about PS3, could be the exact same thing:
The reason for this? The console has a bit of a limit on memory and pixel throughput once you start stacking on modern high-end shaders, AND have to multi-render in order to achieve the (mandated by Microsoft) anti-aliasing. To the best of my knowledge, most PS3 games DO manage full 720p, because while the console is very close to the graphical capabilities of the Xbox 360, it cannot do HDR and AA at the same time; the flip side is that it means that it frees up power it was going to use on one of them, and can use that to boost the resolution a little. In almost all games on the PS3, they pick HDR, and have no AA: this is why, with a good TV, you can notice jaggies in the PS3 version when they aren't there in the 360 version. It's not a hands-down advantage for either console: you basically get your pick of "AA or higher resolution." (one exception is Final Fantasy XIII, which has AA on the PS3, but does not have HDR at all)
If Skyrim tries to enforce a higher resolution, then the detail levels will suffer as a result: the consoles aren't magical "black boxes" that arbitrarily always reach a specified level. They CAN get lag, and they CAN fail to reach certain things... Just that they have fixed settings, carefully picked by the developers to get the best balance at all times. So bumping the resolution means, say, cutting draw distance or lighting detail to compensate. The gamer in the end won't know the inside battle and negotiation that took place in order to make sure they're always getting 30fps, but it happens all the same.