This has always annoyed the piss out of me. It wouldn't have been Bill's or Microsoft's call to make, in the first place. The hardware memory map is not set by software.
The 640K limitation derives from the 1MB address space of the IBM PC, and as the name implies, IBM did the hardware design. They did it around a particular Intel chip, which had a 1MB address space. IBM could've put in hardware support for bank switching (as some EMS/XMS add-in cards later did), they could've used a chip with more than 20 address lines, they could've done a lot of things.
But they didn't. IBM wasn't designing a mainframe-killer, they were designing a personal computer. It was competing with 16k and 64k 8-bit machines, and the first IBM PCs shipped with 64k and later 128k of RAM. Using the top 384K for peripherals and allocating 640K for programs must've seemed insanely generous at the time. But whoever made that decision, it was on the hardware side, not anyone at Microsoft.
The 640K limitation derives from the 1MB address space of the IBM PC, and as the name implies, IBM did the hardware design. They did it around a particular Intel chip, which had a 1MB address space. IBM could've put in hardware support for bank switching (as some EMS/XMS add-in cards later did), they could've used a chip with more than 20 address lines, they could've done a lot of things.
But they didn't. IBM wasn't designing a mainframe-killer, they were designing a personal computer. It was competing with 16k and 64k 8-bit machines, and the first IBM PCs shipped with 64k and later 128k of RAM. Using the top 384K for peripherals and allocating 640K for programs must've seemed insanely generous at the time. But whoever made that decision, it was on the hardware side, not anyone at Microsoft.