You have put things in context; when Hali made the film, brickfilming itself was still somewhat young (Brickfilms.com was just beginning to gain momentum and Youtube wouldn't launch for another three years). There wasn't an abundance of quality webcams on the market for cheap, and a lot of directors wound up working with the LEGO Studios webcam, which was... not crystal clear, to say the least.
This was also one of his earliest efforts, so it suffers from the same problems that plague most beginner films. Personally I think Good Company was his best work, so you might want to check that out if you're looking for something with better quality.