What's the actual reason for real mode still being supported on modern processors in this day in age? Why didn't it die with the advent of AMD64 (aka x86-64)? Why didn't AMD skip real mode and boot directly into something more modern?
When AMD64 came out, bios booting was dominant. You need real mode for that.
In today's world, you could probably release an UEFI only cpu and few would notice. But I doubt it would save enough space to make a difference. And you'd open yourself to criticism from those few that still use real mode: this processor is fake, they'd say, because it has no real mode.
Most likely because for protected mode to function, there is a certain minimal amount of housekeeping data tables that need to be setup properly (i.e. LDT, GDT, IDT, etc), otherwise you'll just immediately take a double fault and the CPU will halt.
Real mode exists today as a gateway to setting up all those housekeeping data tables so that once the "protected mode" switch is flipped on, the CPU will actually find code to execute.