It was 10-20 years ago. The funnest project I ever worked on was to implement a 17-function motor controller with 40-bit precision onto an MCU with 2K of RAM and 64 BYTES of RAM. That was in '93.

Today embedded systems generally run Linux. You get to write a bit of assembly language code in your bootloader, and then it's just bog standard Unix programming. It's even likely that you'll be doing most of your coding in a scripting language, although it's more likely to be Lua than Ruby...

There are still a lot of 8051s and MSP430s out there.

The fun thing about embedded is that since everything is done as a result of interrupts or clock signals it's all the joys of multitasking without a threading library.

I just got handed a project where the 'app' was just main() { while(1) {} } ! Everything happens as the result of functions that get magically called when certain bit patterns appear

Look into Esterel for some theoretical grounding. It will help you reason about reactive systems.

It's my impression that this sort of "fun" work is still done in firmware engineering at Broadcom for instance.

It is and it will be for the long time to come. Bit twiddling has important role in device drivers, firmware etc.