The C128 was... it was just a bad computer, I'm sorry. This was the swan song for the 8 bit machine, the market was moving very rapidly onward in 1985 as it was released (within 3 years or so it would be routine to see new personal devices quoted with multiple megabytes of fully addressable RAM and 256kb+ color framebuffers).
Commodore threw together what they could to keep the C64 band together for one more tour, but... let's be honest, their last album sucked.
[1] vs. software for contemporary PC's that had largely abandoned the equivalent MS-DOS abstractions and was blasting bytes straight into the MDA or CGA text buffers. You could technically do that on the 128 also, but that would mean losing compatibility with a decade of CP/M software designed for other terminals, which was the only reason for having the Z80 there in the first place.
[2] The 6502 had an essentially synchronous bus where the data resulting from the address lines latched at the rising edge of the clock was present when the clock fell. The Z80 had a 3-cycle sequence that needed to be mediated by glue logic to fit what the VIC-II was expecting, and it didn't fit within a single cycle. That's the reason for the Z80 having to run at "half speed", essentially.