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Bike is an all round day to day commuter, workhorse, sometimes distance rider, it's not going to be a hang on the wall and admire type.
Tbh the bearing surfaces aren't that bad, I've put new bearings in and although the rear feels a little rough it perfectly rideable and unnoticeable in use. However as you said, long term it'll be a lot less hassle getting spares, repairs etc with modern components. The general consensus seems to be that's the way to go. I'd hate to get stuck miles from home/abroad with no access to 8 speed replacements if anything went wrong, at least modern stuff gives you peace of mind and flexibility.
zootsuit
@Scilly.Suffolk
What's the bike for? A retro show-pony or do you value function over form?
If the former, then it's worth repairing the hubs. Having said that, for the money you could get another wheelset (even as "spares or repairs", the wheels are worth £50), but then run the risk of being in the same situation in the near future.
If the cups and cones are already worn, then provided new bearings make them ridable, you can't make things any worse than they already are.
But as you're considering 10 speed, it sounds like it's the latter. In which case there really is no choice: the difference between the function of even a fairly low-end 10 speed group and a relatively high-end eight speed group, is marked.
If you were also to get wide-rimmed wheels (eg Fulcrum LG), then your cycling experience would be transformed.
I understand where you're coming from; I much prefer to repair and re-use, than bin worn components, but we're swimming against the tide here.