Whats the point? Do you really draw pictures that detailed that you need 256 priority layers? Come on the resolution is 160x168. I dont think games in 640x480 even have that many priority layers. I get by perfectly fine using the existing 14. Goldrush, possibly the most detailed game gets by fine with 14. What can you do with 256 that you cant already do with 14? I just dont think its worth the time.
With the problem of placing things' baseline on the bottom of the priority band, that isnt actually a problem. You should know that if ego has the same priority of an object, then it appears in front. So, if you had something with a priority of 12 at the top or anywhere in that priority band, and ego was standing infront, then ego appears in front.
The only advantage of having more priority bands, is you can make objects smaller in depth. eg if the current minimum depth of an object is say 10, then you could have it as small as 1, but in a resolution so small, it isnt really needed.