Why is .NET `PixelFormat` has an `Format8bppIndexed` element?

It's indexed because each value is an index into a colour table, which may well be RGB or RGBA with considerably more depth. For example, you could have a palette of 32-bit entries (8 bits for each of red, green, blue and alpha), but the palette itself only has 256 entries, so you can represent each pixel with a single byte. This is (or used to be, at least) common in PNG files.

If you look down the PixelFormat enumeration, you'll see that most values compose two pieces of information:

• Number of bits
• What those bits represent, out of:
  • Greyscale
  • ARGB / RGB
  • Indexed