Known since when, now?
Model 204's deficiencies have been known since about 2004
Since about 1965, you mean. I don't believe anyone ever claimed Model 204 would forever be all things to all people. Certainly since the early '70s people have been able to articulate the relative advantages and disadvantages of different DBMS architectures. When System R and INGRES showed that RDBMSes could offer feasible performance for many real-world applications, most people felt they had to admit that it was horses for courses.
Perhaps circa 2004 was when people started questioning the economics of using Model 204 in this particular application.