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Information in this article may not be canonical to the storyline of the games or any other Sonic continuity.
No Thanks for the Memories!
Some cruder, virtual Badniks were created as part of Dr. Eggman's plan to launch Sonic the Hedgehog and his friends to the moon using a virtual game world as bait. The Badniks acted as obstacles in the game, attacking Sonic and his friends at every chance they got. This was done in order to fool the heroes into thinking Eggman was trying to stop their progress, when in fact, this was benefiting his plan. With the game world destroyed, however, the Badniks can be assumed to no longer be in use.