"..which is still crazy since most people are xfering the film to DIGITAL to EDIT"
The medium used for editing is irrelevant. After the digital edit is finished, the original negative is cut to match it and the release prints are made (indirectly) from that, not from the digital transfer.
The difference in resolution direction is a video/film divide. With few exceptions cinema formats measure the width of the picture (or of the medium, but it's always about width): 8mm, 16mm, 35mm, etc. So when digital came to cinema, resolution aka picture quality was still related to the width of the image: 2K, 4K, etc. Analog video measures resolution in scan lines (i.e. vertical) because of how the technology works, and digital video continued measuring along that axis. It's not an arbitrary higher/lower thing at all, but a reflection of two different histories meeting.
I've had YouTube do that to my videos too. I think it's more likely a marketing intern oversight than what Canon is presenting as the camera's capability. Still, unfortunate.