Are you having the byte read problem on the simulator or on the real hardware?

Be aware that the lcd controller has a read access time and a write access time (as well as other timing parameters)- see the datasheet for the particular device. Changing the crystal frequency on the 8051 has the effect of altering the read and write access times to the lcd controller. For the average character type lcd displays you cannot wire the lcd direct to the 8051's bus if the 8051 crystal frequency > 7MHz (about) as the bus timing would be too fast for the lcd controller - this is why these lcd's are normally connected to the port pins and the code toggles the required pins at a rate suitable for the lcd controller.