1.) Emacs came from CMU and only a few years later after the Vax had was stable (post 4.1BSD)
2.) emacs was not so much prohibited as it was slow, it needed megabytes of memory -- that was limit.
3.) By the time emacs comes on the scene, workstations are showing up, so you did not have 20 students on a vax to UCB.
4.) Raw mode was a V6 feature for PDP-11, by the time of the Vax the TTY was using V7 using CBREAK (1/2 cooked) which still allows canonicalization