It is quite obvious that anyone who has doubts about their immediate financial situation should stay away from major home improvement projects, whatever they might be. For the rest of us, here are a few ideas that should help justify upgrading to a better movie/sports watching experience at home.
1. A lot of people would like to have a larger TV screen. I believe it is a mistake to get the biggest set you can afford and plop it in the focal center of whatever room you use to watch TV all the time. Here is why. At this point in time we have a great discrepancy in the quality of television signals that we feed into our TVs. There is Blu-ray, HD broadcasts, regular DVDs, SD digital broadcasts, regular cable channels, VCR tapes etc. The problem is that although Blu-ray discs will look good on pretty much any size TV screen you have, blowing up the picture of a regular SD cable broadcast would reveal extremely low quality (compared to Blu-ray). The simplest way to deal with that is to avoid watching such sources of the screen that is too large. This, in my opinion, justifies creating a separate media room where you will only watch high-quality content.
2. Human psychology is such that we get used to everything. It is a very simple fact that once you start watching everything on the biggest TV screen you can get very soon this will not feel special to you at all. Imagine if you spent several hours at the movie theater every night watching everything from movies, to nightly news. This would get old very soon. I believe that home movie experience is something that must be cherished and kept as something special. Using a huge TV or a projection screen for all your viewing needs will quickly cheapen this experience. So, the solution is to have a home media room and (also important!) not to use it too much.
3. This is perhaps a minor point, but things like that do add up on the scale of the entire countly. The bigger the screen, the more energy it consumes. If you are watching a news report about energy crises and global warming on a "65 plasma TV you are not a credit to humanity (unless you are strangely interested in Katy Curic's dental work). Limit the use of a bigger screen for special occasions. You will be happy you did (see above).