It's an optics problem. Most of the scattering when looking down is near the objects because that's where the turbulence and air density. Looking sideways has to go through all of that - it's dense, uniform, and turbulent in comparison to the atmosphere above a point.
Another way to reframe this is that you would get a higher resolution looking at an object 100 miles down from space then you'd get looking at an equivalent object 100 miles up.
(Keyhole satellites are at 200 miles.)
Of course, knowing when satellites are above you is a bit easier to know and prepare for (the governments usually know where sophisticated adversarial satellites are). The smaller satellites I think are quite a bit higher - 300 miles - so the balloon can probably beat them provided it can get with 100 miles (even though there's a lot of those).
Funny you mention that because Trump gave away USA-224’s optics capability. You can understand from that photo the kind of resolution you can get from space (during the middle of the day, in August, in a desert - no less).
Another way to reframe this is that you would get a higher resolution looking at an object 100 miles down from space then you'd get looking at an equivalent object 100 miles up.
(Keyhole satellites are at 200 miles.)
Of course, knowing when satellites are above you is a bit easier to know and prepare for (the governments usually know where sophisticated adversarial satellites are). The smaller satellites I think are quite a bit higher - 300 miles - so the balloon can probably beat them provided it can get with 100 miles (even though there's a lot of those).