The c64 interest in Pixelation is relatively recent, as in a year. It was introduced I believe by Ptoing and I posting c64 pieces because we got into that machine for our own reasons at some point. Lots of confusion, explanation, rote repetition of this occured, until it sticked. I consider it a good thing that we get almost on 'uh, change the colors' or 'why are the pixels so wide?' questions anymore, and any interest in variable pixelling techniques is helpful to the artist. Not a huge fan of c64ish art that isn't made by people who have done their homework on the machine and its relatively colourful history, but what can I do.
As to what's interesting about the c64, I don't think anyone should try to explain a fascination to somebody else. Either it does something for you, or it doesn't. Widepixels and a very good fixed palette just proved to be the right thing at the right time after burning out on unrestricted pc pixelling, for me.