Becuase you're generating PDF files with Bitmapped rather than Scalable fonts. For more information, see: http://www.aaai.org/Publications/Author/latex-fonts.html
In order to embed Type1 (vectorized) fonts instead of Type3 (raster) in the PS file, run dvips like so:
dvips -Ppdf testthesis.dviPlease see the guide at http://www.cs.wisc.edu/~ghost/doc/AFPL/6.50/Ps2pdf.htm
There are several ways of doing this...