Intel was trying to maintain backward compatibility, so the segments made sense. (They let you default to using the same 16-bit pointers as the earlier 8-bit CP

Intel was trying to maintain backward compatibility, so the segments made sense. (They let you default to using the same 16-bit pointers as the earlier 8-bit CPU's, and only use the extended capability if you explicitly opted in by adjusting segment registers and the like.) And given the cost of memory and CPU packaging pins, 20-bite probably didn't seem like too much of a loss compared to 24-bit addressing (or Motorola's internal 32-bit).