The limit wasn't insurmountable. With segmentation, the CPU had an address space of 1M, but video memory was in the middle of it somewhere, limiting the possible size of the contiguous address space usable by programs. There were some work-arounds, including machines that added a few more k, IIRC 786k.

Improving matters would have required some coordination among software vendors, or authority from the OS vendor, neither of which existed. Part of the reason for the "closed box" approach of the Apple Mac was to prevent this from happening. My friend described it thus: "If you break our rules, we will break you in the next OS release."

Today it seems like such a tiny amount of memory to squabble over. We waste that much memory without batting an eye.