Yes 8 bit is absolutely a good choice. ARM comes in less than a dollar for the cortex m0 core (maybe others now?) but sometimes that is more than you need in both size and capabilities.

Also sometimes you may have existing expertise, tooling, or firmware already for a processor such as a PIC, AVR, or STM8, so why reinvent?

Some examples may be things like a custom serial to input/output expander, small motor controller, power controller, data logger, or other small and simple machines.