As I understand, movies older than 60 years fall into the control of a public domain. Meaning, any authoring house can take them up and release them without fearing copyright issues.

Shemaroo and Eagle seem to have a great hand in adopting up movies like this. And, a lot of quality cinema falls into this category; including the gems by Guru Dutt, Nav Ketan, Bimal Roy, B.R. Chopra, et cetera.
You can even find rare, rare movies rising up on DVD. Classics from the forties too are seeing the light of day. But here's the most, most, most frustrating part. Shemaroo and Eagle don't seem to bother about the sources they're using to release these movies. Movies like 'Sangdil', 'Baiju Bawra', 'Mr. & Mrs. '55', 'Jaal', et cetera have never looked and sounded uglier thanks to the oh! so ugly VHSs and VCDs that are being used for transferring these movies. Their DVD of Devdas is suspected to be sourced from a YouTube video, which is such a disgrace to the DVD franchise.

It's great to have such noteworthy movies rising up, being packed in handsome covers, alright? But why such a huge compromise over general quality level? Its not all that difficult to find a film print that is in a passable shape and condition. Sigh! The misery just continues...

Whilst I'm not at all defending these DVD companies (they tend to make bad sources worse by putting watermarks on the DVDs), is it really fair to say it's not difficult to find a film print in a passable condition? Where would these quality sources be available? All I've heard are horror stories about the bad storage of prints of classic films.

Yes. Fully agreed. There are so many horror stories about storage problems and loss of negatives/prints, but at the same time there are also stories of the NFAI boasting about excellent storage facilities and availability of some kind of film print of the movies in their archives. So why not make use of those? Even if they are in a messy shape, I am pretty sure its better than using a VHS that is extremely lifeless and hardly even viewable. Sometimes a mediocre VHS can be brought back to life with great expertise and supervision (I have seen remarkable examples of digitalization of VHSs), but are they capable of doing that? It's a no brainer since that is the source they usually opt to use, but you do not see that happening. Hence, the discussion ends on the same note, and the misery continues...

But you are talking about the Indian film/DVD industry. The problem is that the main concern is earning money - which is why we have 6 in 1 DVDs being officially sold. Looking at the other end of the spectrum, with blurays - these are largely of brand new films - how many of these match up to BD standards? If judged by Hollywood standards, half of these would never pass quality control - yet we know that the capabilities exist in India to produce high quality stuff - how many people are willing to pay for it?

Would it still be called pirate if someone make bootleg copy of film that is 60 years or older.