This is true of all mediums. However, there are many techniques to minimizing the blurring effect when enlarging an image with Photoshop, and some of those techniques work very well. The software also has a few sharpening filters which can be applied after enlarging. For paintings, as long as you're only laying down your base shapes and colour tones, you shouldn't need to apply those techniques. A blurred image can appear to look sharp and in focus with properly applied hard highlights, so always wait until after you enlarge before you apply your hard highlights and other fine details.
So far, I am really enjoying starting my paintings with a low DPI and then enlarging them only when it's time to add detail. I find it very difficult to add detail at low DPIs and very difficult to paint whole canvases at high DPIs.