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So,

Let's think that organization needs 5000 IP addresses. Giving 20 C Class IP addresses will cause of adding 20 entries for ISP router. That's problem. We could give Class B IP address, but that will also cause problem, because of waste IP addresses.

We can subnet Class B IP address. For example, Class B IP address is 130.168.0.0. We allocate organization with 130.168.0.0/19 block of Class B IP address (32 subnetworks). So ISP router will add just one entry for 130.168.0.0/19.

It seems, everything works.

1) Why it was decided to not use Classful addressing, if we can subnet them?

2) Can there happen some grand issues or move to CIDR is due to flexibility or something like that?

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We can subnet Class B IP address. For example, Class B IP address is 130.168.0.0. We allocate organization with 130.168.0.0/20 block of Class B IP address (32 subnetworks). So ISP router will add just one entry for 130.168.0.0/20.

That is classless routing. Classful routing means that the entire Class B network can only be used by the domain (company) assigned the network. Classful addressing cannot be subnetted between domains (Inter-Domain). Routing happens by the network class, and that means only one domain can have the addressing in the network and class.

What you propose is CIDR (Classless Inter-Domain Routing). It allows the flexibility to assign a domain only part of a classful network.

1) Why it was decided to not use Classful addressing, if we can subnet them?

You can subnet a classful network within a domain, but not between domains.

2) Can there happen some grand issues or move to CIDR is due to flexibility or something like that?

A company needing only 300 addresses would need to be assigned a Class B network (65,536 addresses) under classful routing, wasting over 99% of the addresses in the network class. With CIDR, the company could be assigned a /23 network, regardless of the initial network bits (part of an old Class A or B network, or an aggregated pair of old Class C networks), and waste far fewer addresses.

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  • What if ISP has a block of class B IP address 130.168.0.0. Can't ISP subnet within domain like 130.168.0.0/19 and assign that to organization. Wouldn't it be subnetting within a domain? So router in ISP will look at subnet mask after it gets datagram by classful routing. I know, it is actually Classless addressing, but again, if ISP can subnet network within a domain, why we've switched to Classless addressing.
    – pedal
    Mar 17, 2020 at 13:06
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    Yes, but you are forgetting that many companies have provider-independent addressing. IP addresses are assigned to companies, and ISPs are just companies.
    – Ron Maupin ♦
    Mar 17, 2020 at 13:12
  • NO. Everything is either classful or not. There is no subnetting in a classful system -- the netmask depends entirely on the address; it's not even configurable. I know it's hard to grasp as true classful systems haven't been around for decades.
    – Ricky
    Mar 17, 2020 at 19:43
  • @RickyBeam, even the original classful RIPv1 allows subnetting within a domain, but all the subnets are required to be exactly the same size. It was the EGP (inter-domain) routing that could not be subnetted.
    – Ron Maupin ♦
    Mar 21, 2020 at 18:34
  • @RickyBeam, subnetting within domains are possible according to TCP/IP Guide.
    – pedal
    Mar 28, 2020 at 21:36

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