As technology marches ever onwards, games generally strive to look more and more like reality, or some other predefined stylised ideal. Game art based on more modern games would probably generally look more like any other type of art, just with characters or themes derived from gaming.

Retro game art is distinct in that the games it's usually derived from are graphically primitive. The usual results of this are either the type of mosaic style pixel art this space invader chap produces or more conventional looking pieces. The appeal of pixel art is pretty understandable, I think. Apart from it being more accessible to the artist, who might have difficulty otherwise rendering things how they'd want them to look, there's a definite charm to the simplicity of it, and lots of interesting ways to produce the pixels themselves(the rubik's cube thing is awesome).

The other way of doing retro game art is to attempt to imagine details of characters and situations that would have been obscured by the inaccuracy of their low-res portrayals. Rather than simply trying to recreate what people are familiar with(as in with pixel art, or art inspired by more modern, complex games), the artist has the opportunity to impose their own ideas as to how things should appear, or the situations characters would be in. The appeal to the viewer is that of seeing interesting or amusing portrayals of belovéd characters.

But that's entirely supposition on my part. To be honest, I can take or leave game art. I mean, there are definitely plenty of game art pieces that I've thought were really good, but I think that their quality is independent of the game they're derived from, or else more akin to really great comic strips than "fine art". Games are best paid homage to by games. While I certainly won't balk at great pieces of game related art(the same way I'd have no trouble appreciating a piece of art inspired by a film), I don't feel it's a profoundly important artistic subculture.