As I said and thought I made clear, MPEG-1/2 were unsuitable for streaming on consumer hardware of the era. The lowest practical bitrates for either was far higher than common dial-up rates. Neither spec supported Sub-QCIF frame sizes or frame rates below 15fps.
Similarly audio was a problem as the specs wanted to use MPEG audio which likewise did not have super low bitrate modes. A software decoder could handle such things but the content was outside of a spec so you'd need the encoder and decoder to work hand in hand to work reliably.
No one decided to develop h.263 and MPEG-4 just for funsies because MPEG-1/2 handled everything with aplomb. Low bitrate/high latency conditions (dial-up, cellular) were not well served by MPEG-1/2.
You did make it clear, you're just 100% incorrect. You can encode MPEG-1 video with any resolution and any bitrate you choose, just like MPEG-4 ASP. It is entirely within spec.
https://en.wikipedia.org/wiki/MPEG-1#Resolution/bitrate
> MPEG-4 Part 2 was an evolution of the h.263 spec
Not really. MPEG-4 ASP has much more in common with MPEG-2. MPEG-4 ASP for example omitted the in-loop deblocking in h.263, which reappeared in AVC/H.264.
> audio was a problem as the specs wanted to use MPEG audio which likewise did not have super low bitrate modes.
This is entirely wrong again. The MPEG-2 standard had defined audio modes down to 8kbits and 16000Hz.
https://en.wikipedia.org/wiki/MPEG-1#MPEG-2_audio_extensions
> No one decided to develop h.263 and MPEG-4 just for funsies
h.263 was developed for very low latency encoding to support real-time video conferencing better than MPEG-1/2.
MPEG-4 SP was an attempt to develop a patent royalty-free codec, which MPEG-1/2 were not (they are, now). MPEG-4 part-2 video does offer some small improvements in quality over MPEG-1/2 (qpel, 4mv), but nothing dramatic. That was saved for AVC, which is of course a significant improvement over MPEG-1/2 at low bitrates.
Nonsense. Variable frame rate is nothing but a very minor bandwidth saver. MPEG-1/2 have a tremendous amount in common with MPEG-4 ASP video and can perform almost as well in most scenarios you can draw up. MPEG-1/2 were mostly hobbled by the use of old, basic encoding hardware and the constrained parameters commonly used (GOP sizes of 12-15) to be compatible with old, basic decoding hardware. Even today you can use ffmpeg to encode MPEG-1, MPEG-2 and MPEG-4 (ASP) video from the same inputs using the same parameters and see very close to equivalent quality at a given bitrate. FFMpeg unfortunately changes it's defaults like resolution, GOP size, etc., to what it thinks you likely want, so you must watch and control for that.