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It's a general complexity issue with higher resolutions and larger palettes. You can restrict one or both, but if you try to apply a high resolution and extensive palette in a single image you'll go nuts trying to use a per-pixel method. Plus, as a general art principle it usually helps to restrict palette anyway, so that the image is focused around a consistent lighting style/mood. In a game based on sprite blitting alone, lighting has to be baked in everywhere, forcing the art style towards uniformity.

Much of the "pixel art" made even at ~320x200x256 is sourced from oil paintings, cels, 3d, or photography and cleaned up with pixel editing. Cleanups can work wonders for any source material at that resolution, but if you look at games from the later 90s which applied these methods to 640x480 and above, the art taken from other sources tends to look like a paper cut-out once composited, because the alpha is colorkeyed, not per-pixel, and no amount of cleanup could hide that. Now that we can use per-pixel alpha everywhere and apply shader effects, 2D is a lot more flexible than it used to be.

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