This is due to the video RAM in the 1MB RAM bank A (soldered on the logic
board on the Macintosh IIsi). Using 256 colors makes this bank of RAM
very busy (the more colors the busier). Consequently, access to anything
else in this part of memory is slow.
Macintosh IIsi
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On the Macintosh IIsi, adjust the RAM cache to at least 384K. As a
result, bank A is all video RAM, RAM cache, and RAM used by the System.
This makes the performance with 256 colors almost as good as with black
and white. Setting the RAM cache higher than 384K does not help much.
This will also work with the Macintosh IIci if you have four 256K SIMMs in
RAM bank A.
Macintosh IIci
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On a Macintosh IIci, if Bank A is not filled with 256K SIMMs (instead, it
is filled with 512K, 1MB, 2MB, 4MB or 16MB SIMMs) it is harder to keep
applications from sharing that RAM bank which is busy. You can try to
boost the RAM cache to approximately the size of the memory in RAM bank A
minus 600K and get similar results, but this takes memory away from your
applications.