[kragen]

Yes, there were lots of 8-bitters that used bank switching. But I think you have the causality somewhat backwards. 8-bitters didn't lack memory protection because they didn't have operating systems that could use it; rather, their operating systems couldn't use it because it wasn't there. Multitasking was of course useful, then as now, and sometimes people did do multitasking on them despite the generally limited memory; it was just less reliable because programs could crash each other. Multitasking was common in real-time control, which is how THERAC-25 happened (on a non-8-bit machine, but due to a race condition between threads).

A common use for multitasking in the 8-bitter era was print spooling; it was very inconvenient to have to wait for your document to finish printing before you could continue editing! People frequently bought external hardware printer spooler boxes to connect between their computer and printer because of this. Similarly, duplicating floppies was pretty inconvenient because you couldn't do anything else while it was happening, even if you had four floppy drives like I did, with literal megabytes of storage space available to read porn or play video games while the floppies were copying.

Historically on larger machines it was also common to use multitasking to overlap very slow disk I/O with useful computation. (The alternative is to use asynchronous I/O and write your program as an event loop, like a game or Node.js, or to do your I/O from interrupts, which is close to multitasking.) In theory this could have been useful on 8-bit micros as well but I don't think I saw any cases of it actually happening.