I'm not sure that 16 (or any other 2^n) bits is that obvious up front.
Does anyone know why the computer industry wound up standardising on
8-bit bytes?
The Industry followed IBM with the S/360.The story of why a byte is 8- bits for the S/360 is one of my favorites since the number of bits in a byte is defined for each computer architecture. Simply put, Fred Brooks (who lead the IBM System 360 project) overruled the chief hardware designer, Gene Amdahl, and told him to make things power of two to make it easier on the SW writers. Amdahl famously thought it was a waste of hardware, but Brooks had the final authority.
My friend Russ Robeleon, who was the lead HW guy on the 360/50 and later the ASP (a.k.a. project X) who was in the room as it were, tells his yarn this way: You need to remember that the 360 was designed to be IBM's first ASCII machine, (not EBCDIC as it ended up - a different story)[1] Amdahl was planning for a word size to be 24-bits and the byte size to be 7-bits for cost reasons. Fred kept throwing him out of his office and told him not to come back “until a byte and word are powers of two, as we just don’t know how to program it otherwise.”
Brooks would eventually relent on the original pointer on the Systems 360 became 24-bits, as long as it was stored in a 32-bit “word”.[2] As a result, (and to answer your original question) a byte first widely became 8-bit with the IBM’s Systems 360.
It should be noted, that it still took some time before an 8-bit byte occurred more widely and in almost all systems as we see it today. Many systems like the DEC PDP-6/10 systems used 5, 7-bit bytes packed into a 36-bit word (with a single bit leftover) for a long time. I believe that the real widespread use of the 8-bit byte did not really occur until the rise of the minis such as the PDP-11 and the DG Nova in the late 1960s/early 1970s and eventually the mid-1970s’ microprocessors such as 8080/Z80/6502.
Clem
[1] While IBM did lead the effort to create ASCII, and System 360 actually supported ASCII in hardware, but because the software was so late, IBM marketing decided not the switch from BCD and instead used EBCDIC (their own code). Most IBM software was released using that code for the System 360/370 over the years. It was not until IBM released their Series 1 minicomputer in the late 1970s that IBM finally supported an ASCII-based system as the natural code for the software, although it had a lot of support for EBCDIC as they were selling them to interface to their ‘Mainframe’ products.
[2] Gordon Bell would later observe that those two choices (32-bit word and 8-bit byte) were what made the IBM System 360 architecture last in the market, as neither would have been ‘fixable’ later.