I saw THE LAST OF SHEILA on its original theatrical release and it had an aspect ratio of 1.85. I don't see anything "lousy" about Warners release of it on DVD. It's an excellent approximation of how it looked theatrically, in anamorphic wide screen and a terrific commentary by stars Dyan Cannon, Richard Benjamin and Dyan Cannon.
The DVD is widescreen anamorphic. I did not find anything wrong the release except colors were not so vibrant, but I contribute that to the film stock used during that era.
The film is a great who done it and kudos to Anthony Perkins and Stephen Sondheim on the script. I am not sure there is any reason to upgrade, even if it was available as a Blu-ray.