This posts explains a bit how a 80C52 port works:

http://www.8052.com/forum/read.phtml?id=11792

Maybe it helps answering your question.

Like Steve already mentioned, you could use shift registers for your purpose instead of 8255. For instance the 74HC595, which is an 8bit serial-in, parallel-out shift register with output latch. This chip could also directly drive your traffic LEDs. For the inputs you could use the 74HC598, which is a parallel-in, serial-out 8bit shift register with latched inputs.

You could also use some slave micros, doing for you the eventually time consuming input signal analysis.

Kai