In Java 8 that parameter is commonly used to print a warning message like this one:
Java HotSpot(TM) 64-Bit Server VM warning: ignoring option MaxPermSize=512m; support was removed in 8.0
The reason why you get this message in Java 8 is because Permgen has been replaced by Metaspace to address some of PermGen's drawbacks (as you were able to see for yourself, one of those drawbacks is that it had a fixed size).
FYI: an article on Metaspace: http://java-latte.blogspot.in/2014/03/metaspace-in-java-8.html