Are you watching the dvd on an older "sqaure" TV by any chance? If so I think they chose to master the entire dvd in "anamorphic widescreen", the problem is half the videos are not widescreen so black bars are placed on the sides of the image. When watched on a older tv it "letterboxs" the image creating the problem your talking about. A pretty crappy move on Sony's part, but they probably could care less about people who don't yet have a widescreen tv.
Oh, and 95% of MJ's videos were shot on 35mm film, that has nothing to do with Sony's mastering choices for this collection.
Half true, True the videos won't look good on Blu ray right now. Going back to the first gen masters wouldn't matter either, the first gen masters are 480i resolution, as the videos were shot on film, they were edited on video. In order to have a true HD version of MJ's videos the original film negative would have to be found, scanned and re-edited on a modern system. The only videos that are HD ready are Thriller, Moonwalker & Ghosts, those where shot and edited on film for theatrical release. A film master exists for all 3 of these and they could have very nice HD releases (moonwalker already does).