> Try running a 16-bit application on Windows x64...
There's no reason for this to fail: dosemu runs 16-bit code on 64-bit Linux systems just fine. You just need to do full hardware emulation which, at this point, is neither difficult nor prohibitively resource-intensive.
There's actually a very specific reason for it to fail. There's an unfixable bug in the way that the Windows emulates 16-bit BIOS calls in the 8086 mode monitor. This is specific to Microsoft's implementation and is (if I remember correctly) an architectural issue (and not the only one). The options are rewrite an emulator or ditch 16-bit support in 64-bit.
I'm not saying that this is the only reason, but it is one. Emulation/Virtualisation is different, but gets the support requirement off Microsoft's books.
There's an even more specific reason. There is no 16bit support in 64bit Windows. It's probably the biggest backwards compat kill they did for 64bit Windows.
There's no reason for this to fail: dosemu runs 16-bit code on 64-bit Linux systems just fine. You just need to do full hardware emulation which, at this point, is neither difficult nor prohibitively resource-intensive.