It's not massively too few, and most lines never get close to the limit anyway, but the odd line of 100-120 thrown in really isn't a problem on a modern display.
...just Googled it: http://programmers.stackexchange.com/questions/148677/why-is...
It's like the railway gauge size being standardized by the ancient romans. The best part of all of this though is the other comments on this page - many of them seem to imply that 80 width was chosen because of how well it fits onto your computer screen and that 100 must be too wide. If the dollar bill in 1890 had been a bit wider, they'd likely be arguing now how 80 is too small!
It proves the point that it's important to actually understand why certain things are chosen and not just assume they're always the best. Going with the standard method is not always the most beneficial path.
I think 80-100 is fine. More than 100 and you probably need to refactor the line some, because you probably have too much logic on a single line (or you need to choose names that aren't hugely long).
Err, yeah they do, I have been given exactly that reason on a few occasions, generally by older engineers who had experience with old-school machines that had precisely those screen dimensions. I don't disagree with your main point, but it's really not a straw man.
I usually work with a file list/project navigator/something to the left and a build window at the bottom of the screen. I usually have two screens so that docs/browsers/whatever can live on the second screen. Seems to work for me.
In my current project I'm using eclipse which has a right-hand panel for build targets. Even with both left and right hand panels there's still enough space in the source window for 130 character lines.
Don't get me wrong, I think most lines should be short and that you should endeavour to keep them a reasonable, readable length. I just disagree with 80 as a hard limit.