ARM code is a fair bit bigger than 16 bit 8086 code, so there is that to consider. It makes total cost of ownership much higher when we're talking about system

ARM code is a fair bit bigger than 16 bit 8086 code, so there is that to consider. It makes total cost of ownership much higher when we're talking about systems with RAM measured in hundreds of kilobytes or single digit megabytes. But basically what you noticed is exactly why RISC swept everything else away in the late 80s to early 90s. If you have a 50,000 or 100,000 transistor budget and RAM is relatively cheap and fast, then complex microcoded designs really are a bad idea. You can get so, so much more performance out of a design like MIPS or ARM rather than an 80186, etc. Hindsight is 20/20. If you sent me back to 1976 - 77 in a time machine, I would propose not something like the 68000 or 8086, but something very much like MIPS, or Berkeley RISC (minus the register windows). It could have been done in the late 70s. It would have been easily 3 - 5x as fast per MHz, and could probably be clocked faster. Doing so just wasn't obvious until later. Everyone was trying to pack as much sophistication into the instruction set and architecture, to ease assembly language programming, as possible.