PetrusOctavianus: Oubliette was made for the PLATO system. I think that was quite a bit more powerful than the first generation of home computers. Not sure how many bits it was, though.
But It was ported to IBM PC for DOS in earlier 80s.
There was always a way to make large maps.
Also 16x16 map can take around 256 bytes of memory. Most of the memory and CPU was used for graphics even as primitive as they were back in 80s.
Even now, one can make grid-based first-person-view game with size of maps 1000x1000 and more, but we rarely see anything higher than 32x32.