8bits is only 0 to 255. So, you would only be able to represent 255 feet of elevation. Maps in Sims 3 can have a max elevation of 300. Other games and applications have much higher max elevations. From my research on the issue, 16bit gray scale PNGs are the standard for heightmaps. As if you are modeling the real world, you would need 16bits. The upper limit would be needed if say you were modeling an area that included Mount Everest, the highest mountain on Earth at 8,848 metres (29,029 ft) and the deepest part of the Mariana Trench at 2,076 metres (6,811 ft) below sea level.
While most games don't have maps more than a few hundred feet in elevation, using what is standard allows for the import of data already available from other uses and sources. As such, I can go to the USGS website and get the elevation data I need and export it from the viewer. Then all I have to do is size it to the scale I need, crop it to the map size I want, smooth or otherwise edit any areas that might not work well in the game I'm making the map for, then save it back as a 16bit greyscale PNG like I got from the viewer. Load it up in the editor and make the map.