The slowness was due to a hardware bug in the 6522 VIA chip. The shift register (FIFO) would lock up randomly. Since this couldn't be fixed before the floppy drive needed to be shipped, they had the 6502 CPU bit-bang the IEC protocol, which was slower. The hardware design for the 154x floppy drive was fine, and some clever software tricks allow stock hardware to stream data back to the C64 and decode the GCR at the full media rate.

https://www.linusakesson.net/programming/gcr-decoding/index....