8cm seems rather large but certainly the insertion depth can be a significant proportion of the length of a small drill bit.
There are a few factors to consider. First think of a really small drill bit - 2mm for example. if this is sticking out a long way, it won't take much sideways force to bend the bit and, as tool steel is quite brittle, possibly snap it. It will also wander if you're starting a hole.
Now think of a reduced shank drill bit (such as a 20mm drill that fits a normal 13mm chuck. This has a shoulder meaning the maximum insertion depth is about 2cm, and demonstrates that the back of the drill bit doesn't need to be up against the chuck fixing screw.
For an in between case you can choose - I sometimes start with the bit fully in until I've got a good start (to avoid wander) and then put it a bit further out. With masonry bits used with hammer action you may want the bit to sit right into the chuck. While the whole chuck exerts the hammer force on the bit, a small insertion depth can cause the chuck to work loose especially with hammer. Some of my masonry bits have flats and a shoulder so don't sit all the way in, but still insert to a decent depth.
This all applies to cordless drills as well, but I find that with a keyed chuck I can get away with a little less drill bit in the chuck.
