Stone age technology
At that time the capacities were about 0.2 to 2GB. FAT16 could only handle up to 2GB per partition and there was a bad chance that a 'modern' BIOS would limit you to 2GB per disk (recently improved from the 500MB limit). As hard disk tech improved more rapidly than software the near uselessness of a 2.5GB hard disk gave the better manufacturers the opportunity to focus on reliability.