Depends on the games. Since the explosion of BF1, more games are making the switch to multiple threads, using upto @8 generally. The older i7's already having 8threads capability are still definitely holding their own, but the older i5's are having a hard time in gta5, sw Battlefront, Witcher 3, pubg, BF1, BF4 etc. CoffeeLake i5's using 6 full cores are working approximately the same as the older hyperthreaded i7's, yet with better IPC, so are currently the king of budget cpus. Obviously the i7-8700k and it's 12 possible threads is killing everything.
There's 2 major areas in pc builds. Performance and aesthetics. Everybody builds a pc according to one or the other, or a mix of both. Some insist on pure fps performance, and will sacrifice a good looking expensive case for a cheapo one, just to get the next model up gpu. Some don't care about fps, as long as the pc looks sexy on their desk. Most will at least try and color coordinate ram, mobo etc. Full custom loops just happen to be the pinnacle of both, the absolute best (if it's at least built right) cooling capability + the sexiest looking builds there is. If you have the wallet for it. There's really no budget solution for full custom loops.
You cannot ever overcool a cpu. Undercool is absolutely possible, the forums are full of high temp complainers. Overcooling just means that no matter what punishment you subject the cpu too, be it stress/torture testing or rendering or any of many other 100% loading programs, you'll never need worry about cpu temp thermal shutdowns. Bonus is slower/quieter fans.
So being as there's not really any such thing as overkill cooling a cpu, a full custom loop on an i5-8600k will remain just 1 thing (again, if done right). Sexy.