Lower bit depth/palette encoding has not been a state of the art option for compressing natural images like this for decades, and nobody is claiming it is. If

Lower bit depth/palette encoding has not been a state of the art option for compressing natural images like this for decades, and nobody is claiming it is. If you're doing this, it's either because your medium is limited (retro games or 8-bit equivalent embedded systems), because you can't afford the CPU power to decompress something more complex (unlikely these days), because lower bit depth is ideal for the rest of your image (e.g. largely UI graphics with no gradients, and just a few small graphics), or because you just don't care. But given those reasons exist, there is value in researching better dithering algorithms. Also, to some extent, these things also apply to non-palette formats (dithering to lower bit depths), and that is still relevant today when e.g. converting HDR content to typical 8bpc (24bpp) formats.