I find the info on the DX format particularly interesting. If I am understanding the chart correctly, a DX camera is just barely capable of meeting the minimum resolution required for a standard-quality print, and even then, only within a narrow range of f stops.
I agree that digital is lousy, to oversimplify heavily, but I am happy with the b/w prints I get from my 10D at 6x9 or 8x12 inches. They blend nicely with my film prints IMO. So resolution is obviously a very unimportant factor in the way I personally judge prints, I guess.
Your interpretation of the graph in reference of DX performance is correct. The 'enlarged' performance of DX is sufficient to satisfy the resolution of our eyes at a comfortable minimum viewing distance of about 10 inches. Actually, the entire graph is only relevant for prints larger than 8x10. Even pinhole cameras can satisfy human viewing resolution if the print is small enough. With larger prints, our eyes get closer, relatively speaking (print diagonal), and at that point, DX is seriously challenged by 35mm film.