Form controls are replaced elements in CSS.
10.3.4 Block-level, replaced elements in normal flow
The used value of 'width' is determined as for inline replaced elements. Then the rules for non-replaced block-level elements are applied to determine the margins.
So the form control should not be stretched to 100% width.
However, it should be centered. It looks like an ordinary bug in IE8. It centers the element if you set specific width:
<input type="submit" style="display: block; width:100px; margin: 0 auto;" />