Memory limits in 16, 32 and 64 bit systems
They do, the system is called Physical Address Extension (PAE). Here is a list of windows OS'es and their max memory, any 32 bit system that allows for more than 4GB of RAM is using PAE to access the memory (For example Windows 2003 R2 Datacenter 32 bit allows for 128GB of ram).
In fact Windows 8 requires a PAE capable CPU in it's minimum requirements.
To address your "unasked" question on why your 32 bit OS can't access the ram if it exists: Licensing. They choose not to allow RAM to be above 4GB for their 32 bit OSes unless you pay for a data-center edition (that is why they sell a data-center edition, if you need that much ram, you likely can afford to spend more money on a OS).
Instead of explaining it myself, I'll let someone who has to maintain a kernel with PAE support speak in his charming ways, Linus Torvalds
- PAE sucks (Why didn't MS take advantage of PAE?)
Also keep in mind that the PAE support in Windows 32bit versions comes for a lot of cash. XP won't even be able to make use of full 4 GiB of RAM normally, because MS chose to not enable PAE features on it. A kernel that is closely related, Windows 2003 Server, does support PAE. However, even there your "Standard edition" will only support up to 4 GiB (but working around the BIOS memory hole), whereas the more expensive editions will then allow up to 64 GiB of RAM. The same holds for 32-bit Vista.
However, not in all cases is this limitation imposed by Windows. If it were, booting a PAE-enabled Linux kernel would still enable you to use the full 4 GiB (or more). Not so, some hardware manufacturers chose to impose this limitation at the BIOS level, although the CPU and chipset would be capable of handling PAE.
Just a side-note: none of the current x86-based 64bit processors can even address the full range of the 64bit address space physically (for reference see this question and answers).
8-bit CPUs usually had a 16-bit address bus. (Motorola had a unified address bus, RAM and peripheral I/O shared the same address space, Intel chose to divide the two. In the case of Intel, the IO address limits of the 8088 and 8086 carried the limits over from the 8080 & 8085 CPUs.)
Intel's 8088 and 8086 had a 20-bit memory address bus(1MB), while Motorola's 68000 had a 24-bit address bus (16 MB). IIRC, the [80]286 jumped to a 24-bit address bus. Both later expanded to a 32-bit address bus with the [80]386 and the 68020 respectively.) With the Pentium chips, the address bus expanded to 64-bits. (I think the Motorola/IBM venture PowerPC chips also went 64-bit address bus.)
Memory available below and up to the maximum that could directly be accessed by the CPU was only limited by the supporting hardware chips (chipset) and OS. Bill Gates was famous in the past for stating that nobody needed more than 640K of RAM, thus DOS never evolved to directly access more RAM. With HiMem.sys and EMM386, DOS was extended to access more "upper" memory, with EMM386 being used to directly access all available RAM. HiMem.sys had less flexibility and could basically use the extra RAM for storage.
Memory exceeding that limit required a MMU (Memory Management Unit) to break the memory into segments and map it into the addressable memory space of the CPU. It's how the CoCo 3, Commodore 128, and other 8-bit computers could access more than 64K of RAM.
More favorable now is to use virtual memory to extend past physical memory limits, albeit with the limits imposed by the OS.