No, it wasn't
It's the "great idea" that sounds great 5 min in and horrible 10min afterwards
You know, kinda like using null as a string end character
But more importantly it kept the x86 world for too long in that dead end that was 8086 mode programming
"Oh if developers would just..." They won't. They haven't. And they will not ever.
In hindsight maybe a binary level translator from 8080 to 8086 would have worked better (and be simple enough)
But what should Intel have done? They needed a CPU that can run 8080 code but with more memory. Also it's the year ~1980 and we're limited to the technology of the age.
A system with 64k sized windows seems unavoidable.
If you extend the size of the address registers, 8080 code will only run in the first 64k, or require some kind of current window register.
An 8080 mode might have worked but that would have been expensive.