Just remember all those graphics program's that were written on 8 bit micros running at a quarter the speed of an arduino that were produced in the 80s.
Brings back fond memories of the C64/C128 and the amazing work people did in assembly to make that processor sing, speak, and display some pretty amazing graphics.
As for whether 8-bit CPUs are obsolete, there is a place for them, so why not use them? As others have pointed out, the ability to drive strong signals without having to resort to external transistors is a good one. But is it life-changing? No... just that especially for beginners the ability to interface directly with an MCU is a big help because it potentially eliminates a link or two in a chain of things that can go wrong.
8-bit microprocessors will remain for as long as manufacturers are willing to make them. My guess is that the low end of the market is slowly eroding as manufacturers upgrade their manufacturing lines and obsolete old MCUs in the process. As an example, look at the DS2423, a chip with a dedicated following - discontinued with no substitute. By eliminating that chip Dallas/Maxim also guaranteed the death of the 1-Wire platform for many other applications - counters are very useful!
Margin pressure will also play into this, it's pretty funny to see 8-bit MCUs selling for more $$$ than computationally much more powerful 32-bit MCUs. At some point, the market will hit the tipping point and the bulk of development will go to 32-bits even if a 8-bit MCU was perfectly adequate.