You say that, but I was able to reduce the code size of some avr8 stuff I was working on by removing a whole bunch of instructions that zero out registers and then shift a value around. I don't it to literally shift the top byte 24 bits to the right and zero out the upper 24 bits, I just need it to pass the value in the top 8 bits direct to the next operation.

I agree that most people are not writing hand-tuned avr8 assembly. Most people aren't attempting to do DSP on 8-bit AVRs either.