You might be young enough to not remember how much engine performance turned to suck after about '74, and stayed that way for 15 years. Those '70s changes were worthwhile, but the 90-10 rule absolutely applies here.
The management was mostly of the opinion that gas prices would come down eventually, so there was little interest initially in making anything more efficient. Also, since small, efficient, cheap cars had miniscule or negative margins, there was a belief that competing in that market was optional.