The exact details of how this is all put together is a bit beyond the technical level of this post, but since the address is only 7 bits, you can only have 128 devices on the entire bus (with 7 bits that can each be on and off, there are only 128 total different combinations of bits possible). This includes your computer, so that leaves 127 other things you can attach to it.
As for why they only chose to allot 7 bits to the address field, keep in mind that this bus was designed to run the keyboard, mouse, printer, and a few accessories attached to your computer (like maybe a scanner or a digital camera). Most people never have more than half a dozen devices attached to their system, so 128 devices is far more than the average person needs.
Address 0 is reserved devices coming out of reset not the computer. For example say you have a hub with 5 devices plugged into it. on reset the hub will listen to address zero. The PC will then send a request to the hub at address 0. This request will ask the hub what it is. The hub will respond that it is a hub. Until the hub is configured it will not pass the requests to the down stream ports. The PC will then assign a non zero address to the hub. The PC will then turn on the first hub port to which something is attached and send a request to address 0 to find out what is attached to that port. Then that device will be assigned a non zero address. This process repeats until all devices are configured.
Hehehe. 640K of Ram? Hi there 2004. 10 years later we don’t even measure in kilobytes anymore, we use gigabytes now. I, at the time of this post, have 16gigs of Ram in my computer and use about 8 during a game and more when multitasking. Don’t ever under estimate how technology will advance. Who knows maybe some day we will have networks where someone will need that many usb connections. Certainly someday someone will make an account on here for fun to make fun of me for the current specs of 2014. I have no doubt that someday there will be terabyte ram, usb networks, and beyond.
You probably meant to type an M there, which would still have been a monster machine for 1987. The 486dx2 I used in the early 90s had that much RAM, and the chip itself was only available in 1992.
A fully loaded ETA10, a beast of a supercomputer in 1987 (with 10 gigaflops of performance! 8 CPUS! liquid nitrogen cooling) could have 2 gigabytes of RAM.
I remember a friend who had a conversation with a tech support guy who absolutely would not believe her when she told him she had 32M of RAM in her machine - he thought she didn’t know the difference between RAM and Disk. But, these were Macs used by graphics designers, and they had lots of RAM for Photoshop.
The limit is not 127 devices per computer, but 127 devices per bus. Computers often have multiple USB busses, plus the ability to add more through expansion cards.