I noticed with a few games on my brothers old CRT on the 360 I couldn't read a damned thing, so I just grabbed my Xbox VGA cable and plugged it into the monitor.
It is a problem, and not everyone wants to buy a new TV, so font size should be decided on what video output option is selected (1080p/i, 720p, 480p etc.).
Can't exactly afford to buy my brother a new TV just so he can read what the hell people are saying...