Nowadays, there's PPPoA (over ATM) which wraps at a lower level, and allows 1500 byte ethernet payloads through. But running the ethernet over ATM at 1508 MTU so that PPPoE would be 1500 was probably out of reach --- when PPPoE was introduced, the customer endpoint was often the customer PC, and some of those were using fairly old nics that might not have supported larger packets.
Sadly, smaller than 1500 byte MTUs still cause issues for some people to this day. It's all fine if everything is properly configured, or if at least everything sends and receives ICMP, but if something is silently dropping packets, you're in for a bad day. These days, I think it's usually problems with customers sending large packets, as opposed to early days where receiving large packets would routinely fail, but a lot of that is because large sites gave up on sending large packets.
Sadly, smaller than 1500 byte MTUs still cause issues for some people to this day. It's all fine if everything is properly configured, or if at least everything sends and receives ICMP, but if something is silently dropping packets, you're in for a bad day. These days, I think it's usually problems with customers sending large packets, as opposed to early days where receiving large packets would routinely fail, but a lot of that is because large sites gave up on sending large packets.