Hey i have an iPad 4, when it comes to watching HD videos on Youtube the highest quality setting is only 720p. Isn't the ipad 4 capable of viewing 1080 HD?
Youtube saves bandwidth by streaming only 720p to devices with small screens. You can't tell the different in 720p and 1080p on a 9.7 inch screen, but you can on a 67-inch screen. So it forces the lower resolution. You iPad is not at fault, blame youtube.