Why don't systems speed up?

Back in the 1990s when the Pentium was out I upgraded. I bought an AMD586-133-P75 based '486 board. It had a 486-133 motherboard, with this jumped-up (single core) '486 which ran '586 instructions (slower). The trick was to set the m/b on the 'DX2-80' settings, whereupon it ran 160Mhz. Ram was 128MB, hard drive was puny, but this was probably the fastest loading box I ever had, in terms of kernel & X, and faster than all the superior peripherals we have today. And we had X,sound,internet, all you'd expect today.

Admittedly, linux has gone up from a cdrom or two to a dvd, and some libraries & executables simply wouldn't fit in 128MB of ram. Why is everything so big? Have the devs left in redundant code for addressing ISA cards? Serial ports? Expanded Memory?

How come a newish box with multiples of memory and cpu frequency and 2 cores can't pass out an old banger like that surely was?