If the image out of the camera is perfect, and needs no post processing, probably doesn't matter too much. If you need to post process (adjust levels, curves, colour, sharpness) then working in 16bit mode will result in a superior image - you can only get this by converting RAW to 16bit .tif.
Another reason - post processing software is improving all the time. I'm amazed at how much better results from the new Capture 1 LE software are compared to RAWs processed with Breezebrowser or Canon software - fortunately, because I always shoot RAW, I can go back and apply this enhancment to my older images.
Colin K. Work, Pixstel