I never played Joust back in the arcade days, but I just took a look at the arcade game in action...
The Atarisoft version was certainly possible. It wasn't like Zaxxon where you just weren't able to make it work in the limited RAM conditions of the unexpanded console.
That said, you'd probably have had single color sprites for the knights and player, because doing sprite rotation with only the scratch-pad memory would be exceedingly difficult.
If you made a 32K version of it, you could make a pretty good Joust game. Maybe I will sometime.