This isn't being conservative about upgrades. This about an IT department refusing to learn to do anything they weren't doing in 2000.
At worst, it allows independent software vendors a small market for regular repeat business. At best, people just keep using XP the same way they've been doing for years.
Maybe the new search page uses features only found in the newest browsers. But since we have little details to go on (apart from the employee's canned response of "we are constantly updating functionality"), I'm skeptical that in fact they did this just for the sake of doing it "for the users' own good". That is wrong, imho
And it's not just about stuff not working on simple machines - many sites are awful to use on recent smart phones and recent OSs because they have only been tested on local networks on development machines. No one has tested them on normal machines.
We went through this when cell networks decommissioned analog service and again when the early digital stuff was phased out. It turned out not to be such a big deal – once the phone company hit you with a higher bill to support the old equipment, almost everyone quickly decided learning how to use a new phone wasn't so bad.
This is similar: companies are hoping that the rest of us will subsidize their IT decisions with increased development and support costs. The difference is that most places lack a mechanism to pass along those costs so they're rarely confronted with a cost comparison.
I also designed things on IE7 & IE8 and there is definitely some major problems on IE8 which cannot be solved magically by graceful degradation. I think that IE9 is generally fine however, if you design everything with graceful degradation in mind and the website is quite simple it should work (appart for weird borders around images sometimes, but it's fine with a bit of css).
I've definitely experienced z-index bugs, floating bugs, padding bugs, display bugs (with inline & blocks) and core JavaScript bugs in IE8 which are making the website unusable.
IE8 is definitely not IE9, while it's still better than IE7 and there is generally less issues, there is still IE8 specific work to do to make the website compatible. And depending of your strategy within the company, it might not be worth trying to fix these issues. (this is quite costly).