Never wondered why 14. But makes perfect sense. Early Unix feels like a masterclass in minimalism under constraint. Also fun detail: Unix V3 had 8-character limits before DOS made it famous.
Also even with 255 limitation, there could be optimizations in place with struct/union, similar to small string optimization done in C++ and modern languages.
However even considering this was a non-starter in PDP-7/11, there is no excuse why since 1989, WG14 never considered adding capabilities to the standard library similar to SDS, or language improvements like fat pointers (There was even an attempt proposal from Ritchie himself).
They had 36 years to improve this.