For the execution environment in which firmware SETUP ran, there were often hardwired assumptions, particularly in the parts of SETUP that provide full-screen TUIs with menus and entryfields and pop-up help boxes and whatnot, that the screen was 25 rows high.

Also remember that SETUP as a whole was often a mess of different ROM programs from different manufacturers. Far too many thought it their own ROM's business to clear the display and set text mode before they splashed their copyright strings, prompts, self-test, and hardware auto-detection information up.

Yes, they could have done things properly. The way to detect an existing screen size was there from the VGA onwards. And they could have left the display uncleared. And the whole preserve-my-graphical-splash-screen thing eventually did happen.

They did not.

The way to detect an existing screen size was there from the VGA onwards.

When you only have a few KB in total for your option ROM, that's a luxury you can't afford. You can either sacrifice some other important feature of your product to appease the tiny minority, or assume 80x25.