They weren't good but Max Payne 3 was definitely worse. The Alan Wake cinematics also didn't try to pass themselves off as being in-game - there was a noticeable break.
Yeah, I can understand why they're used but if they're going to go that route then they should pre-render them at 1080p @60fps with maximum settings, then compress them further if needed to fit on the game disc. Especially as Max Payne 3 was released on PS3 with it's Blu-ray drive - they should have taken advantage of the extra storage space for higher resolution cinematics. It just doesn't make any sense to me.
If it added an extra GB then yeah they should've rendered with 1080p as the baseline. That being said, 30 GB is already quite hefty for a game.