Comment by jchw

Dithering can be for aesthetic reasons, I presume especially old-school dithering that is especially pronounced. However, dithering is actually still useful in all sorts of signal processing, particularly when there are perceptible artifacts of quantization. This occurs all the time: you can trivially observe it by making gradients that go between close looking colors, something you can see on the web right now. There are many techniques to avoid banding like this, but dithering lets you hide banding without needing increased bit depth or choosing strategic stop colors by trading off spatial resolution for (perceived) color resolution, which works excellently for gradients because it's all low frequency.

And frankly, it turns out 256 colors is quite a lot of colors especially for a small image, so with a very good quantization algorithm and a very good dithering algorithm, you can seriously crunch a lot of things down to PNG8 with no obvious loss in quality. I have done this at many of my employers, armed with other tricks, to dramatically reduce page load sizes.