So the 286 was an, ahem, IMPERFECT processor. But mighty IBM blessed it as the official successor to the 8086/8088 when it released the successor to the original PC, the PC Advanced Technology (AT) -- built around the 286 -- in 1984.
Suddenly the world was full of 286s. IBM sold tons of them, of course, simply by virtue of being IBM. And the nascent PC clone market felt compelled to pick up the 286 as well, simply because they could not survive in a world where IBM was selling "the future of the PC" and they weren't.
And once there was a big installed base of 286s out there, programmers started looking for ways to take advantage of protected mode. (IBM and Microsoft started working on what was intended to be the successor to DOS, OS/2, around this time, and one of OS/2's big features was multitasking.)
But all those programmers rapidly ran into a horrible truth. The only way to take advantage of the 286's killer feature in YOUR program was to convince your customer to throw away all their OTHER programs -- all the ones they'd bought that were written for the original IBM PC, or in other words, for real mode. The user would have to be running a 100% written-for-protected-mode software library, or else they would constantly be rebooting their computer.
And guess what! The customers didn't want to throw out all their existing software! Particularly when they had been told the new machine they were buying was 100% backwards compatible with the old one!
The result was predictable. The customers didn't want to throw out their old software; the computer could only use its snazzy new feature if they did. So all those computers ended up just never using the snazzy new feature. They ran in real mode all the time, running the old DOS software just like it ran on the original PC, just slightly faster.
Which was kind of a buzzkill when you'd paid thousands of dollars more for the shiny new PC/AT than you would have if you'd just bought a clone of the original PC.
All the big projects that had been launched to take advantage of the 286's protected mode ran head-first into this barrier. The OS/2 project floundered as IBM and Microsoft tried to figure out how to cope with it. Microsoft wanted to just skip over the 286 altogether and make OS/2 require Intel's upcoming successor chip, the 80386, which was supposed to remove the boneheaded "you can check into protected mode, but you can never leave" limitation. But IBM had sold a massive pile of 286-based PC/AT machines to its customers on the promise that OS/2 would run on them. From IBM's perspective, OS/2 HAD to be made to work on the 286, no matter how bad the 286 was -- because otherwise they'd have the entire Fortune 500 screaming at them about false marketing.
The result was predictable. The customers didn't want to throw out their old software; the computer could only use its snazzy new feature if they did. So all those computers ended up just never using the snazzy new feature. They ran in real mode all the time, running the old DOS software just like it ran on the original PC, just slightly faster.