I personally think this is an absolutely brilliant move, especially with the 8-bit graphics. Yes it would look better with more modern graphics, but intentionally choosing not to shows some artistic direction that could lead to brilliance.
Personally, I loved how, for instance, Pokemon D/P used a 3D engine yet intentionally made it look like a tiled original GB game. While it makes it look less impressive, it also looked really unique compared to everything else that was out at the time. A new 8-bit styled game will certainly look different from most new titles, that's for sure.