This likely happened due to budgetary constraints. Storage space was much more expensive then. 10 extra bytes x 10 million records is 100 megabytes of hard driv

This likely happened due to budgetary constraints. Storage space was much more expensive then. 10 extra bytes x 10 million records is 100 megabytes of hard drive space. That's a few thousand dollars in 80's money, just for storage. That doesn't include redundant drives, backups, extra RAM, and whatever else is needed. The limits have probably been in place for 40+ years and nobody wants change it. Or maybe nobody knows how. It's much easier to tell them to abbreviate their name as "Chris" and move on.