Replacing a 555 timer is a very common job for this type of part. It will typically have an internal oscillator, so it won't need the additional components the 555 needs, reducing cost further. Even if you use something more expensive like an ATtiny (cut down version of the microcontroller found in Arduinos, so very easy to develop for) it might still be competitive because of the reduced parts count and board space.
Hmm. The argument for using a microcontroller to replace a 555 is the increase complexity, and risk. There is code to be written, programming process install at manufacture etc. So it is not necessary cheaper if you at a level higher than the BOM cost.
