The narrow image is actually correct. Pixel aspect ratio of the original console is not 1:1, but 32:35.
Here’s the math of what the actual aspect ratio of visible area is:
320 * 32/35 = 292.57
292.57/240 = 1.219 -> less than 1.3333
On original CRT displays, this would not have been apparent because of overscan cropping the image.
See also my
old post here.