Pixel art is nostalgic for many, but a big reason why it's used in indie games is because it's very easy to animate and look passable.

I thought it was nostalgia, but I see teenagers that love pixel art games, even though the art style is twice as old as they are. The style aged way better than, say, the PS1 era, where most games just don't hold up, and most of the ones that do happened to still use pixel art.

When it comes to old pixel art games though (as opposed to the new ones), it's a matter of accuracy. There's plenty of articles and videos showing how different it is to try to use a naive emulator on a modern, upscaled OLED vs how the very same game looks in a surviving old Trinitron with a SCART cable. If you are looking at, say, old Atari 2600 games, there's no reason to try to pretend to be a Trinitron. But for SNES? Sonic in the Genesis? Reproducing the screen with square, perfect pixels often looks worse.

Still, flash games are getting emulated, and so do Quake-era FPSes. Sometimes we rediscover older gameplay, or more readable art. Other times it's only nostalgia. But pixel art in itself? It's just effective. Modern games just throw away some of the limitations that didn't make the games better: Go look at Sea of Stars. We couldn't have made that game work in a SNES: Too much memory, too wide a palette, more animation we could ever fit in that hardware. And yet, it's a descendent of the old RPGs stylystically, and it looks absolutely fantastic by any standard.

Pixel art was certainly out of fashion for a while, but it came back in the 2010s because a) nostalgia, b) a counter-reaction to soul-destroying AAA game business, and c) the rise of indie games thanks to Steam.

I have zero nostalgia for pixel art. It is its own thing. If you can't recognize that, you must be blind.

Obligatory Xiao Xiao reference: https://www.newgrounds.com/series/xiao-xiao