I'm not talking about adding the 32-bit ModRM & SIB byte to the 8086, just the single-register subset with no special cases. Decoding would be exactly the same

I'm not talking about adding the 32-bit ModRM & SIB byte to the 8086, just the single-register subset with no special cases. Decoding would be exactly the same as for register operands. And there would still be microcode, just not for adding the base+index register - maybe for adding an offset if it is present. Yes, the 8086 was simple, but all the parts needed to do this should be present: whether an instruction uses register or memory operands is entirely under the control of hardwired logic, the microcode is the same for both (the address calculation subroutine runs first, but is invoked automatically by the hardware). I would say Intel chose to make addressing more complicated in order to add a feature that complicated register allocation for very little usefulness. If you see something like [BX+SI] in disassembled code, in 99% of cases it's not an actual instruction, but data or misaligned code.