The zoomed image looks normal to me (for small-sensor digital cameras that is).

In fact I would say that pic looks better than most. I’m used to seeing a lot more artifacts at that zoom level in digital camera images.

I think most digital cameras do significant amounts of post processing on the images to hide artifacts caused by the image sensors. At high zoom levels you really start to see it. But it’s better than no post processing at all. It’d be worse without it.

Do you have any apps that let you shoot raw? I don’t recall if Apple allows that. If you did you could download the raw file and look at the difference.