"What aspect are you talking about that you consider to be going against the old philosophy?"

Pretty much anything that slow it down.

"The old home computers (at least the Atari) *did* provide an API to programs. There were established and documented OS "entry points" that you'd call to execute certain functions. Knowing where and when to use those entry points was as critical as the code in your program"

Yes, but I should imagine the OS (can we really call it an OS?) would be fully aware of what hardware it was connected to and read/write to it as efficiently as possible. Games programmers would naturally ignore the OS entry points altogether and write directly to the hardware. If you add an extra layer of abstraction (an API to cater for different display devices, for example) you'll be giving the 8051 a lot more work to do.

"This is more of a fun project "because we can" and to see how much we can push the 8052 to do."

Surely a large part of the fun is to see how fast you can get it to go? It would be a bit disappointing if it wound up slower than a 20 year old home micro...

"To achieve some of the flexibility that will make the 8052 seem to be more a computer than a microcontroller we obviously have to sacrifice some efficiency."

I don't really understand how the flexibility to use different display devices will make it seem more like a computer. All it's got to do is plug into the telly and display 320*200 in 16 colours and it'll seem exactly like a computer. To me anyway. A 6845 CRT controller (still emulated today by something, somewhere in every PC) and UHF modulator would give it a really authentic feel.