Are they back in style or a thing of the past?

Another is that it tends to be easier to make art for retro style games as the resolution is really low.

Pixel art tends to actually be more expensive than a lot of conventional illustration styles...

What a perfect opportunity to spam with a link to my retro game

Ditto!

http://www.indiedb.com/games/grand-strategy-space-war

The reason I think retro gaming has reached a certain audience lately (which is also described on my blog) is the possibility to make games pretty much exactly the way they were, and only improve the input.

While its always arguable that modern gameplay is more or less interesting than these games, there's been an undeniable leap in User Experience and Usability over the past few decades.

My favorite example is Dune 2. It's a great strategy game that packs a TON of features that most of its successors couldn't achieve. Yet, you can't multi-select units (either through dragging a box around them, or even holding a key) and can't make "fast orders" with, say, the right-click. These are two important improvements that were made with future installments of the genre, generally in games with limited gameplay.

Making a retro RTS now could be based on a reboot of the Dune 2 microcosm of gameplay, all the while leveraging modern UX/Usability in such a way that the end-result would be undeniably easier to manipulate, and appeal to a bigger crowd all the while retaining the core aspects of what made the game good in the first place (as opposed to random sequels that manage to break this important balance).

There's also something interesting about the level of abstraction involved in pixel-art. In pixel-art, every single pixel matters, but if you look at it from up-close, it generally makes little sense. Its an art that expresses itself by the way it evokes things rather than depicting them, and though most of it is left to the imagination (which creates a form of subtle interaction with the player), the general idea is conveyed nonetheless in a highly optimized fashion.

Finally, as ActiveUnique puts it, there's a number of things we can do now that weren't done before in these games because they simply couldn't back then.

In a way, retro games are an attempt at maximizing design space instead of spending time on state-of-the-art visual. They pick up olds games, and see how they could be improved using modern technologies. The CPU power now compared to then allows us to do crazy stuff, whereas these games used to struggle to fit on a floppy disk, or fit their allocated memory. By not using all of the RAM and GPU for graphics processing, we get to play with more consuming routines such as open world or random generation of elements, or bigger databases.

As a developer, I find it highly satisfying to look at previous games that I believe were very good (for their time) and fix everything that I feel was wrong about these games. To me, it feels like a reliable approach to making objectively better games. Although there will always be purists of specific games, few will actually feel offended that you've taken on a few "old games" and fixed what was wrong with them (provided people agree at least on these criterias).

Game style is a relatively new feature, compared to let's say furniture design, architecture (buildings) and (clothes) fashion. These art-areas tend to go in cycles. I think games have faced has closed it's first cycle of style. Also, the games retro thing is similar to the overall retro trend (diy apple jam and bee keeping) where you should go back to your roots.

Many things is driving this, these are just some of them :)