In hindsight it seems rather inscrutable. Why were they hobbling their product like that? Well it seems just the arbitrary preference of one executive. But the seeming absurdity of it is partially an artifact of later thinking, from the era of single-chip microcontrollers. The 4004 and 8008 both needed a large amount of dedicated support electronics. Not just bus multiplexers, but clock drivers, special memory interfaces, etc. You couldn't turn an 8008 on without at least half a dozen support chips which were as much an integral part of the "computer" to the designers as the 8008 itself was. And while multiplexing brutally hindered the chip's performance, oddly enough pure performance doesn't seem to have been a major design goal for either the 4004 or 8008. Basically anything would be fast enough -- even multiplexed at 0.5 MHz -- for the industrial control and calculator-like applications envisioned.