And whilst the reason for using ^Z has fallen into history, the system utilities still honour this mechanism

*Most* do. For example, type currently stops at ^Z while more does not.

In my experience, fewer and fewer programs supported it as times went by up until DOS 5 days (or so) where it became impossible to rely on.

Regarding your asterisk, text editors were the first applications I noticed to stop honoring ^Z, so his trick would have been the first to fail for me.