The IBM PC was 16-bit, though, like the TI 99/4A and SNES, despite its 8-bit data bus. The C64 was introduced in 01982, and people kept selling CP/M systems and TRS-80s for several years after that. I agree CP/M was pretty dead by 01988.

Commodore seems to have really believed obsolescence wasn't real. WDC launched the 65CE02 in 01988, and Commodore tried to build the Commodore 65 on it in 01991.

A decision I've never understood from that period: IBM introduced the PS/2 Model 30, with an 8-MHz 8086, in 01987. The 8086 was from 01976, but at least it had a 16-bit data bus, and at 8 MHz it was over a MIPS (though only 0.4 Dhrystone MIPS if we believe http://www.netlib.org/performance/html/dhrystone.data.col1.h..., that's still 8 times the Cromemco Z2 with its Z80, and 20 times the C64, though at this point we're well outside the area where Dhrystone is a good measure). They did replace it with the "PS/2 Model 30 286" the next year, but unfortunately not before my school district got suckered into buying some of the crippled beasts.

I agree that the C64 was pretty similar to the Atari 800, but it had much better sound, it had 256 multicolor sprites instead of 8 two-color sprites, and the 800 shipped with 8K and couldn't hold more than 48K. So there was a pretty big difference in what you could do on an Atari and what you could do on a C64.