IMHO, the touchbar had more to with competitive positioning against microsoft's touchscreen than optimising benefit for the user. It's the new 'one button mouse'.
An 8 year release process lines up with the release of touchscreen-enabled windows 7 and 8. Sure, they may have been investigating it before the windows release, but the choice to produce this hamfisted feature, rather than a touchscreen, still looks like a competitive reaction.
Many things take lots of time to develop, and lots of things never make it into an actual release.
EDIT: khaledtaha's comment above sounds even more plausible, give the strategy Apple currently appears to be pursuing.
Steve Jobs: "I'm as proud of the things I have done as the things I have not". Jobs would not have brought this version of TouchBar to market; not a chance.[1]
[1] My source is my personal opinion and anecdotal. If I'm not unimpeachably correct in this assertion you should downvote; there is no possible means to prove the assertion so only judgement can decide the validity of my claim. While I had met Jobs and had multiple run-ins with him in Palo Alto (I was an avid walker and lived on Ramona for several years), I never knew him well on an intra-personal level.
It doesn't matter what Jobs would've done. It's a different Apple now. Also "Never ask what I would do. Just do what's right." Tim, Jonny or whoever clearly thought the Touch Bar was "right".
If you need a massive disclaimer at the end of your comment explaining that something you expressed as a fact shouldn't be treated as a fact what's the point? Jobs made plenty of bad product decisions, some much worse than the touch bar.
You sure it was a reaction to MS?