The image quality is fine - you're seeing the pixels on the screens. The resolution of the Valve Index is 1440 x 1600 per eye.
Check out the HTC Vive Pro. 2880 x 1600 at 615 pixels per inch.
How come whenever I run anything else (e.g. some games) on that same headset it looks crystal clear, but when I try to use Enscape it's horrible? It's surely something to do with how Enscape itself handles the rendering, rather than the resolution of the headset itself, which should definitely be better than the image I am currently getting.