Re: Where would we be now?
I'm really not sure what you mean by "their security models have been pretty flaky at times", because it has not changed. The standard UNIX security model has not changed significantly in 40 years. It is amazing that it stands up at all against what is available in modern operating systems, let alone be regarded as more secure in some instances.
Whilst it is far from perfect, it is simple enough to be well understood by most people working with it, something that I don't believe is really true about some other operating systems. This means that it was and is used correctly. Also, remember that UNIX was not just multi-tasking from the word go, but also multi-user. It was a mature although developing operating system when the IBM PC was launched.
At the time of the original IBM PC, UNIX could and did run on 16 bit machines. You must remember that Xenix (which ran on IBM PC/XTs), was based on UNIX Version 7, and UNIX Version 7 ran on PDP11s in as little as 128KB of memory. In fact the architecture of non-I&D PDP11s required the kernel to fit in less than 56KB of memory.
The biggest problem is that UNIX has always worked best on systems with hard-disks. The basic tool set of UNIX (effectively the / and /usr filesystem) was around 2.5MB on a PDP11 IIRC, so squeezing that down to 128KB disks was an impossible task. That's not to say people didn't try. I saw several floppy based implementations of UNIX around at the time, but they were generally slow and barely usable. Also, pipes working through floppies (early UNIXs at the time used an unlinked file to store the pipe data over 1 block) were incredibly slow.
There were small UNIX systems available at the time. AT&T had their 3B1, and other people like Onyx, Tadpole and Torch (and many others) had mainly 68000 based UNIX systems available, albeit more expensive than a PC. And the interesting thing is that these contemporary systems to the IBM PC were already 32 bit systems, not 16 bits like the Intel 8086.
Life really would have been better based around UNIX on PCs!