Bit level vs byte level

Am I correct in believing that video game consoles such as the NES used graphics and instructions at the bit level?  Why don't modern operating systems use instructions that are only a few bits rather than bytes?  You'd be doing the same operations at 1/8 the scale.

It's just a tree, that's all. It doesn't do anything. You just parse an XML document into a tree and call it a DOM.