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Hmm so I had checked the datasheet earlier, never actually looked at price and availability, I see what you mean.

The main idea was to save pins, they run out quickly on the tang nano. I guess the simplest solution is to step up to the spartan 6.
There is OctoQuad by DigitalChickenLabs for the pi pico that will do a similar thing for 8 encoders via I2C but as you say it would also require a new plugin.

Cheers.
Russell.

Hi Russell,
the LS7366 are no longer manufactured and you would have to write a new plugin. The ones you can still get are also quite expensive.

can't you just make a plug-in board (on the top) and route all the encoder pins to the top via pin headers?

Cheers, Olli