As far as I understand it, it's not an 8-bit centric competition. I think Chronamut favours the 8-bit style rather, because he mentioned in the contest title that it leans towards "old school".
" (Oldschool Version)"
I believe that because everyone's interpretation of "old school" is different, a variety of different styles is still acceptable.
I do acknowledge that this contest is rather nostalgic, and therefore does indeed look backward rather than forward, but there are plenty of NAC ideas still floating about and therefore still plenty of opportunity to explore current forms of video-game-themed music, indeed such as "Dead Space", in the future.
Contest rules and constraints may be seen as restrictive, but could be seen as motivational as well. Competitors could potentially explore styles and techniques outside of their comfort zones and therefore expand their knowledge and experience. Whether it's seen it as a "block" or a "challenge" is up to each individual.