HotPaw2, the "best answer" is probably incorrect:
This allowed only 32 kB of DRAM, and 8 bit plane layers was far more than fit in memory.
4 Hi-Res bitplanes take up the exact same amount of memory as 8 Low-Res bitplanes.
At Max overscan, the NTSC Amiga can fetch 768 pixels, and in PAL mode can do at least 566 lines, which adds up to 54,336 bytes, not 32K.
Claims that there would be problems with copper, blitter and 68K are inaccurate, since we have all see 16 color, Hi-Res Amiga OCS screens. That's the exact same same amount of data as an 8 bitplane low-res display. In short, if you can do 4 bitplanes in high-res, you can do 8 in low-res. The color register count is the real issue.
Also, "CLUT" does not really apply to the Amiga. "Lookup tables" is a crass PC concept used by software people who don't understand hardware. You know, the kind of guys who think everything is a Sprite. The Amiga uses Indirection to gate RGB values from the color registers. Even the Sprite output goes through the same circuit. There is no "lookup". There is no table. A 5 bit value selects which of the RGB registers have their bit patterns gated out to the DACs.
While the OCS chipset has the bandwidth for 6, 7 or 8 planes in Low_res mode, there are only 32 color registers. Sure, the cycles for 8 bitplanes are there. But the difference between 5 bitplanes and 8 bitplanes, means you go from needing 32 color registers to 256 registers. That's 8X as much space on die!
It should have been done. But at the time, 32 color regs, whose RGB levels you could change, plus a HAM mode must have seen like a ton when the specs were set in 1984. Hell it was still viable in 1994.
Commodore seemed to realize that more was better, and EHB mode was added. I can't recall if this was an OCS revision or only in ECS and later. It used 6 bitplanes but was saddled by having only 32 color registers, so they used the 6th plane for a half-as-bright modification to the register define by planes 1-5.
You have to wonder why they didn't add more color registers- it should have been doable without blowing compatibility.