Well, sort of. It depends on your BOM cost targets. I remember seeing (a few years ago now) an AVR in a tiny 6 pin surface mount package about 0805-ish size. 8 bit micros are the new 555.

I have a friend that does a lot of consumer electronics development on contract. One of his favorite parts is an 8 bit micro that cost 6 cents in bare die, and that was a few years ago. The part is probably 4 cents now. A 4 dollar ARM looks rediculous next to a 4 cent part in certain application spaces.

But in my world - low volume mechatronics - the ARM with 1mb flash is the no-brainer choice.