Vegas uses the tools supplied by other software makers to encode the streaming files.
You need to know how to get the best out of those tools.
Vegas allows you to encode Windows media files in hundreds of different combinations. The same is true in QuickTime.
If your WMV files don’t look good, try increasing the bit rate. Also, you can choose a variable bit rate, or you can do a two pass consatnt bit rate.
You did not say what you were encoding for( The web or for some other reason). I can tell you right now that you can encode a WMV 1080i or 720P file that will blow your socks off. All you have to do is set up the encoder to do it.
Here’s a sample. https://www.filmguideseattle.com/images/jrcc720.wmv