Is Hi10P a better method of video encoding than "regular" 8-bit H.264? Yes.
What does it mean that a method of video encoding is "better" than another? It simply means that it can produce smaller files with the same quality.
In audio, there is the difference between lossy and lossless encodings, where MP3 is a popular lossy format and FLAC a popular lossless one. This is a common misconception. Both are lossy in compared to the ACTUAL source, the highly analogue audio produced by the artist(s), the lossy/lossless differentiation is only in regards to the (already lossily encoded) CD audio.
FLAC is, however, inarguably BETTER than MP3, since MP3 cannot produce the same quality, seeing as how it drops parts of the signal it encodes. Most of us can't hear which is better of a good quality rip of either, even if we CAN spot that there is a difference.
In video, on the other hand, there is no such thing as lossless encodings. Even the common sources (DVDs and Blu-ray discs) are encoded, the former in MPEG-2 and the latter in, generally, "mainstream" 8-bit H.264.
Wait, say what? The SOURCE is ALREADY encoded in 8-bit H.264? Yes, it is, even though there are of course exceptions. Blu-ray supports a variety of encodings, of which 8-bit H.264 is the most common. Hi10P is not one of them.
So, for the BEST quality, the pure disc rips should be used, which is generally 8-bit H.264. However, most people with higher IQ than they've got terabytes of storage prefer something...smaller . Hence, the re-encodes generally referred to by filesharers as "encodings" or "releases".
Back to Hi10P vs. 8-bit H.264. But I've already said Hi10P is better, why do I need to return to this? Simply to return to my main point - it is better because it can produce the SAME quality with SMALLER filesizes. As the source is (quite often) 8-bit H.264, a Hi10P encode can NOT magically make the video itself better.
TL; DR.
So the real question is, does the decrease in file sizes (25%, I believe I've read here?) warrant the decrease in portability of said files - which will not function in, for instance, common Blu-ray players, many of which CAN handle most 8-bit H.264 releases?
For the small percentage of us with SSDs (small but quick storage) and high-performance computers, I believe the answer is yes. For the rest of us, I'm not so sure. I, personally, would appreciate a (1080p OR 720p) 8-bit H.264 slot, at least for now.