We have a couple of good thread about the 265S.
There's this one,
viewtopic.php?f=1&t=3552 , which while more specifically about the board WDC sells, it's fair to argue that the board is little more than a 265S "breakout board", so most of it is germane to the 265S.
It is a nice chip.
As a pure, general purpose CPU, you get "Free" address decoding -- the 265S does not multiplex the Address and Data bus like the 816 does.
You also get some free memory decoding logic, which is kind of nice.
The price for that is an exotic startup sequence, and a different set of interrupt vector registers. At that level, the 265S is not 1:1 compatible with the 816.
Also, the 256S can only go up to 8MHz, whereas the 816 can go to 14MHz.
As a 7 port MicroController SoC, it's pretty limited to a layman. Since WDC is in the Core/IP business, not the chip business, it's not really motivated to do much more with it. Because it certainly has potential.
But you can get a pretty good general purpose CPU out of it, with a free UART or two and at least one 8 bit I/O port, and another few bits on the other one.
If you compare the W65C816SXB board with the W65C265SXB board, even after gimping the SoC to get it to address your RAM and such, you have an ALMOST as capable board (the 816 board has 2 more 8 bit ports), but at a far, far less chip count.
Plus you get a bunch more chip selects on the 256S board than the 816 board, as it exposes the entire memory space. If you're willing to forgo large swaths of memory, you can easily add an other PIA or something (for example, give up the top 4MB of RAM and use the chip select for your device instead).
So you could easily have several MB of RAM and some more IO ports with a low chip count.
You could turn the 256S in to a greenfield project, bypass much of the extras built in to it (both software and hardware), but still have a "better" chip than the 816, just not as fast. It's just a bunch of it is "wasted".
With minimal extra hardware I think you could easily take that 265SXB board, add 1MB of RAM to it, add that USB w/FAT32 chip (the CH376), and have a free parallel port and 2 Serial ports. Populate the Flash with your own loader and on your way. That's a pretty capable system. Being on the 265SXB, it would run at, what, 3.68Mhz.
If you look at the 265SXB board, it has 5 chips: MCU, RAM, Flash socket, a USB<-> Serial chip, and a NAND gate package to help qualify Write Enable.
All that said, the 40 Pin 65816 chip is a very hobbyist friendly chip, up to 64K, and works as a nice "fast" 6502+, given the 816 instruction set. I don't want to say "nobody", but "nobody" (save for BDD) seems really interested in the 816 for its larger memory size. It seems more popular for its programming model as a better 6502.