Q: Will Apple refund purchase of iPhoto as it's not usable in iOS 8

Probably not. If you want to find out for certain, click here and ask; if it turns out that you can, you’ll need to use the form to do so.

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Will Apple refund purchase price of iPhoto as it's not usable in iOS 8?

Why should Apple do that? You bought iPhoto for iOS 7 and it is still working for iOS 7. Apple's AppStore licence does not promise, that the apps will work with future versions of the operating system or on newer hardware.

Apple provided a way to migrate your iPhoto Library to Photos:

Migrating from iPhoto for iOS to Photos on iOS 8

And some help to find your photos in Photos:

Get help finding your Photos in iOS 8

But granted; the demise of iPhoto is a sad loss. And we can only hope, that future updates of Photos will bring back more of the missing functionality of iPhoto.