I believe I picked this up from my 8051 Guide but I could be mistaken as I am a little new. My answer refers to generating a 3Mhz signal from the MPU running at 11.0592 MHz.

If you are using a 12Mhz crystal, which you are not, the actual code processing is done at ~= 1 Mhz; Crystal/12. Since the MPU is using clock cycles to move code bytes from memory and do other needed internal math and movements you are losing clock speed without any code actually being processed.

In the end most instructions are 2 clock cycles and final output must accomodiate the actual loop timing.

Hope that helps,

John