The difference is that iPhone apps are designed for literally either one or two resolutions. (iPhone 4/4S or iPhone 5). This means that the apps are actually one size in a rectangle. Android apps are almost always able to scale, but that doesn't mean they scale well. My favorie whipping boy apps for this continue to be the official Twitter and Facebook apps. Try running either of them in landscape on a device like the Nexus 10. They look terrible. Sure, they aren't pixelated and blown up, but they still look terrible regardless. Now, this is more the developers fault than anything, but it doesn't mean that the situation is better than iOS, just different.
I think one of the reasons for the success of the N7 is that smartphone apps don't look terrible on it because the device is physically smaller, so it's easier to get away with apps that aren't made with the device in mind. That doesn't make the situation better, but easier to cope with. And in all honesty, some "tablet optimized" apps look pretty bad on a 7" android tablet. The most recent update to skype being the current favorite example. It isocked to landscape and useless if you're trying to use it for IM. Another one I like to point out is IM+. the Tablet interface would look great on a 10" display but I found it unworkable on a 7" display, so i'm using the smartphone UI and it works fine.
A great example of an app that looks good on all screens is Plume for Twitter. on a phone it is a single column view that you swipe between different columns. Super efficient. switch it to landscape on a tablet and you actually get a multi-column view like tweetdeck, and it works really nicely. That's why it's been my Twitter app of choice for years. They've done the UI so well.
my tl;dr is that while iOS phone apps aren't great on iOS tablets, at least you know what you're getting. on Android the situation is all over the map, and in many ways is more of a mess, but still better all at the same time.
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