The resolution for the back-up camera is not very good. How much will it cost for an upgrade? The 8-inch screen is hi-res but the back up camera is very fuzzy.
Do you have something to compare it to? A friend of mine has a 2011 Limited with the 6 inch screen and I find the camera to be quite clear all things considered. Most likely you just need to clean the lens.
I don't have a Highlander. But I have never had an issue with the backup camera on my Tacoma. Maybe the backup camera is defective. That is all I can think of.