That's not accurate.
The human eye can't discern the added benefit of 1080p, at normal viewing distances, unless the screen is larger than 50", but to say that 1080p isn't good unless it's 50", gives the impression that the quality of the picture goes down with 1080p the smaller the screen. That's not true at all.
In general, you go by the native res of your TV. If you view any content that doesn't match the native res of your screen, then your TV has to process and scale the image to match the native res of the TV. Some TVs do a better job of that than others. Some components may get in the way and not allow your TV to do its job, as well. That's another story though.
Bottom line is that you want to go with what res matches the native res of your TV. 1080p won't adversely affect picture quality on a smaller screen if that smaller screen's res is actually 1080p.
If Madden looks worse on 1080p than 720p, that's because it's not a true 1080p source, and the software is not doing a great job of upscaling it. In that case, leave it at 720p and your TV may do a better job.
There is no one size fits all solution to this for every TV. There is also the element that some people's eyes and knowledge are questionable, and they may not be seeing what they think they are as well.