We still need specialized hardware for this?

AVX is built for people who want to put some effort into developing a reasonably fast and reasonably power-efficient implementation of their algorithm, but who don't want to spend years and many millions of dollars to build an ASIC that can do it with greater speed or efficiency.

A lot of stuff falls into that category; but many image processing algorithms have particularly high performance requirements (IPU6 claims to support 4K video at 90fps, which is a lot of pixels in a thin battery-powered device) and are mature enough that Intel can be confident they'll still be useful several years later, in which case it's worth investing in dedicated hardware.

The tradeoff keeps shifting as algorithms change and as general-purpose processors get more efficient and as specialised hardware gets more flexible, but I think the long-term trend is towards increasingly complex combinations of specialised hardware and microcontroller firmware and CPU software, which needs more sophisticated APIs to handle synchronisation between all those components.