I've experienced this same issue over the years and never been bothered to address it (until now).
The problem: When I select a single point feature in a point layer (usually with a large number of features covering a large area) and then do a zoom-to-selected, either via arcpy code or manually in Arcmap, the zoom doesn't zoom in to a sensible scale I.e manual zooming is required to get to a level where the selected feature is distinguishable.
Why is this. Do I need to set some kind of zoom-to-scale property or environment variable, or is it a problem with spacial indices or something along these lines?