Re: every byte mattered ...
The 8088 had the merit of existing when IBM needed manufacturing volumes of whatever they chose, so I don't think we should be too harsh on them for that decision.
As for segmentation, the 386 could have run a perfectly usable 32-bit platform with virtual DOS boxes for old software, in 1985. That's much less than 10 years after IBM's decision. If it actually took much longer before the world was free of 16-bit segments, it is because of much later decisions.
Biting the hand that feeds IT
