There are two different factors to determine how close a viewer should sit to the screen of their home theater (field-of-view and picture resolution). To choose a proper distance, it is necessary to understand the impacts of both, and understand when trade-offs occur.
There are multiple ideal seating distances depending on the equipment and the preferences of the viewer. Here the details of these two separate factors:
- Field-of-View based viewing distances: The THX and SMPTE specifications are based on a field-of-view being a certain width or wider, meaning that all seats must be closer than a certain distance to the screen. In general, the wider the field of view (the closer the viewer sits to the screen), the better. This specification does not take screen resolution into account.
- Resolution based viewing distances: The Visual Acuity distance is based on resolution of the screen vs. the resolution capability of the human eye. Unlike the field-of-view based distances, this occurs at a fixed distance from the screen (where eye resolution = screen resolution). If the viewer moves further than this distance from the screen, they start losing out on the available resolution of the screen (eye resolution < screen resolution). If the viewer moves closer than this distance to the screen, the deficiencies in the projected image start to become more apparent (eye resolution > screen resolution). This specification does not take field-of-view into account.
With a 1280×720 projector, the viewer must make a decision as to which is more important: no visible resolution deficiency or adequate field-of-view width. If the THX specification is used, the viewer will be close enough to detect resolution deficiencies at the max seating distance (or closer). If the Visual Acuity distance is used, the user will be too far away from the screen to have a wide enough field-of-view. Here is a chart comparing the two:

As is discussed in this previous post [1080p does Matter. . .], the significance of the 1920×1080 resolution is that it is the lowest resolution at which there is overlap between the Field-of-View based viewing distance and the Resolution based viewing distance. In other words, these two specifications are no longer mutually-exclusive. The resolution of the screen is significant enough to match the resolving capability of the human eye and, at the same time, give an adequately wide field-of-view. (Note: 1920×1080 resolution-based viewing distance falls slightly short of the THX Recommended Max Viewing Distance, but it does meet the SMPTE Max and THX Allowable Max distances.)
I was recently asked if sitting 2/3rds of the way back in a commercial theater is too close. The answer is: it depends. You would need to 1) specify the resolution of the screen (pixels or film grain size) and 2) specify which is more important to you: a wide field of view -or- no apparent resolution deficiencies -or- both. Maybe the resolution is so high that sitting even closer would result in both better perceived picture quality as well as a more immersive field-of-view. Maybe not. It depends on the image resolution.
In my personal opinion, I think that having a wide field-of-view is the most important factor. Also, resolution-based seating distances are subject to much more person-to-person variation and are more of an estimate than are field-of-view calculations. However, every seating distance that meets the THX specification is not necessarily a great place to sit because the THX specification does not take screen resolution into account. It is important to understand the limitations of the THX spec, understand the interaction with screen resolution, and then choose the equipment and the seating configuration that best fits your needs.
I know of no published minimum seating distance specification based on field-of-view. At some point between the rear row (a 36 degree field-of-view) and the front row (approaching a 180 degree field-of-view) in a commercial theater, viewing becomes sub-optimal because the pixel density/film grain structure is insufficient and/or the field-of-view becomes too wide. I believe that, for practical reasons, THX has not published a minimum seating distance. No theater would pay for the THX certification if it meant that they had to remove the front 20 rows from every theater (they probably just assume most shows won’t be sold-out and the bad seats in the front rows usually go unoccupied.)
“Proper seating distance" is not an easy value to define and is truly in the eye of the beholder. But it is worthwhile to understand the various factors when looking for it.
If you're wondering what the proper seating distance should be for your specific home theater, you may be interested in my Home Theater Calculator Spreadsheet.