As I wrote elsewhere the 800m women is a strange event. Of the 70 fastest athletes of all time (all sub 1:57 since 1976) only 7 have run their best marks in the last 10 years. Three of these athletes have been banned from competition in the event because of an intersex condition. The other four mostly ran their fast marks being dragged along by Semenya. One of these 4 is Hassan, who prefers longer distances.
There are several factors at work here: Historically tainted discipline where 70s/80s style doping was very effective (and so is abnormal hormone level because of rare conditions), domination by an athlete like Semenya for the better part of 10 years that might have driven athletes into different events, and generally the growing importance of longer distances for women that made the 800m less important. When the Eastern bloc women ran 1:55 en masse in the 80s, 3k and longer had just been introduced into the women's Olympics.
I think that with Semenya gone we will see a different 800m than in the last years. The level will obviously be lower (because the fastest are gone, also in their function as second lap pacers) but slowly more women will see a better chance for them in the 800m. Nevertheless, the historical record seems to show that in times with decent controls 1:57-58 are very good times for a woman and maybe we should not realistically expect faster.