ASCII was always a multi-byte codeset. The characters were designed so that one could use overstrike to write things like á (á) by writing a BS ' or ' BS a. This worked for most lower-case characters that have diacritical marks in Latin scripts. It didn't work for upper-case characters unless the terminal or printer understood this and had special fonts, but then, that's why Spanish historically doesn't require accenting upper-case letters.

This all goes back to typewriters, where this is how one typically wrote accented characters.

And most of this got lost. Though we still use overstrike for underline and bold in the terminal.