A:tLA, on the other hand, was created for 480i with a 4:3 aspect ratio. There simply isn't enough information to allow for an HD transfer -- a Blu-ray version would offer nothing more than the ability to put more episodes on a disc (and, I suppose, less of the artifacts that exist on the current DVD transfer, if they went back and made the transfer from the original tapes).
Not entirely true. First off, when you draw an animated series, you don't draw each frame interlaced. Or at least, if anyone did that, I would question their sanity. However, the original drawings, while they are definitely still a 4:3 aspect ratio, are "analog" drawings, meaning that if each individual frame were to be rescanned, a higher quality scan would arise from it. It all depends on how much detail was put into the original drawings. I've never heard of this being done for a hand animated TV show, but, for a live-action example, Seinfeld was shot on 35mm film, and so was remastered in HD for airing on TBS years later. Also a lot of movies get released on Blu-ray because they're on 35mm film and so therefore just need to be reconverted to digital.
I would, however, hate if they cropped off the top and bottom to make it a 16:9 image. Going back and redrawing each frame to add stuff to the left and right is unheard of (although South Park, being done entirely on computers was rerendered in the new aspect ratio) and would be time and money consuming. However, 4:3 HD is not unheard of. According to Wikipedia, during 2009, Spongebob episodes were 4:3 1080i.
I'm pretty sure Bryke have mentioned before that they still have all the original drawings/frames. I'd be curious to know the cost in time/money to rescan each frame, if they were drawn to enough detail to be worth it.
I was thinking that it was more likely that they'd just have the master tapes rather than all of the original drawings, hence the 480i comment. If they had the master drawings, that part could definitely be improved.
As for the detail of the individual drawings... it's definitely not up to LoK-level.
Here's a shot from LoK's finale showing characters at different distances:
And here's one from A:tLA's last four episodes:
It's hard to see in the shrunken versions, but Korra's medium shot has as much detail as June's much closer shot, and Wing and Wei are actually drawn more
on-model than Sokka and Katara (look at their eyes!) even though they're farther away.
In general, everything in LoK has an extra level of detail added, and sometimes in Book 1, it went above and beyond even that. A:tLA wouldn't look like an HD show even if rescanned. =/