[Gibbon1]

From memory the reason given was test machines topped out at 40 pins. Anything bigger was much more expensive to test. IC Testers 40 years ago would apply inputs sequences to devices and check that the outputs were correct. Works for simple logic but already was a problem for processors.

The 8086/8088 multiplexed the address and data busses to get the pin count to 40. Which wasn't bad when using DRAMs since they're also multiplexed. Again to save cost.

Advantage of the 8088 was the 8 bit data bus. So you only needed 8 DRAM chips. Which was a big cost savings. And extra 16k of DRAM could be hundreds of dollars.