I wanted to expand a little on footnote #4, regarding how CD-ROM drives weren't really standardised.<p>At the time, because of the lack of standardisation, there were a lot of different device drivers for different CD-ROM drives, and those would take up space. Even the boot disk that Windows 95 lets you create doesn't contain any CD-ROM drivers!<p>It wasn't until Windows 98 that they included CD-ROM drivers into the boot disks that you could create, and even then it had to load multiple drivers, just to make sure that the drive you were using was actually supported.
> A technical reason is that the miniature version of Windows 3.1 compressed to only 441,906 bytes, or just under a third of the capacity of a single floppy disk.<p>Microsoft used DMF, a custom format, for Windows 95 install floppies that held 1680 KB, so 441 KB would be about a quarter of one.<p><a href="https://en.wikipedia.org/wiki/Distribution_Media_Format" rel="nofollow">https://en.wikipedia.org/wiki/Distribution_Media_Format</a>