All in all, simpler operations and systems benefit from an 8-bit architecture given not only its lower cost (for large volume manufacturing this makes a huge difference) but also possibly lower power (although with more modern architectures this can be highly debatable).
8-bit Atmega328 : about US$ 1.70, in large quantities > 1000
32-bit STM32F301K6U6: US$ 0.986, in multiples of 10k
So, the 8-bit uCs loses in that aspect. Also, the faster the CPU runs a routine, the faster it can go into sleep mode and stay there longer until there is something else to be executed. That saves a lot of power, because they are executing things for a much shorter time. So they are more power-friendly than the 8-bit.
In short: 8-bit uCs are more expensive and use more power.
Their price advantage, however, is not on the chip itself, but on the supporting circuitry that is required to make them run. An AVR, for instance, can be run with nothing but a bypass cap... and on a breadboard! You don't even need a xtal if you use the internal oscillator. Most 32-bit CPUs need more external circuitry, which makes the project a little more expensive and take more PCB real estate. Try breadboarding a Cortex M3...
The part where 8-bit uCs really shine - at least in my experience - is the easiness to code them. Take the Arduino or PIC ecosystems: there are lots of examples for everything, and it all works even on slightly different chips. Even if you use Atmel Studio, code is simple enough and most times you don't have to worry if you have an Atmega8, Atmega2560, Atmega328 or Atmega1284: the code is very much the same most of the time. When it comes to 32-bit Cortex chips however, you have to code for the specific uC you have, and that is a pain the ass.
Neverthless, I still use mostly AVRs. Why?
First, I have about 30 chips at home, of several models (M8, M328, M1284), because I got them for cheap from Amazon the last time I went to the US. Second: I save tons of time in development. Like I wrote, easiness of coding is what makes 8-bit shine at the moment, but hopefully this will change.