This content has been retired and is no longer available in game.
The 8-Bit Realm was found in the The Distant Woods, it was reached via The Inexplicable Door. The pixellated monsters here all have 15 HP and don't drop any meat, though they are rich in pixels; each can drop up to three of them. Pixels can be brought to the crackpot mystic for him to craft with.
A primary stat of 20 is suggested. If your main stat isn't high enough, you'll see the following message:
The Inexplicable Door's name itself refers to earlier (mostly 8-bit) games that had a door outdoors that you had to enter to complete the level. These doors weren't attached to any building, and were thus inexplicable.
The fact that you encounter Buzzy Beetles instead of Goombas after you ascend is a reference to the fact that, after beating Super Mario Brothers, you play a harder set of stages where all the goombas turn into buzzy beetles.