Did you check your display performance, which controls how an image is viewed on screen? Start with View > Display Performance > High Quality, and uncheck Allow Object-Level Display settings.
Well, I did check that setting and I'm on High Quality. I unchecked the "Allow Object-Level Display Settings," but that didn't do anything. Still, thanks for the hint! Any other ideas? Might this be something I just have to live with on screen display, but will resolve itself when I print? (I'm imagining printing from a .pdf, if that makes a difference.)
If the effective ppi is 400, you should be fine.
Even with high quality display, images will look nowhere as good as in Photoshop.
Especially diagonal lines tend to be jagged.
Might this be something I just have to live with on screen display
The image preview is a proxy and not the actual pixels, so yes you have to live with a trade off for performance even with the High Quality setting. It's easier to see when the placed bitmap contains type like logos or screen captures.
See #11 in this thread