Still taught in montessori schools as a tool for the development of fine motor control. Education in Montessori is literally hands-on for everything, as they feel the hand is the instrument of human intelligence. So for them it's like practicing a musical instrument or learning to draw.
Previous to your comment, my experience with Montessori schools was limited to hearing of people sending their kids to them. Now I wish I'd gone to one. :)
But it appears also that kids who were taught cursive express more complex ideas in their writing later on - http://www.psychologytoday.com/blog/memory-medic/201303/what...