I hit the same issue in 3.4.1
It looks like the update command does not support windows8. The cordova-cli readme suggests this by not listing update command under the Windows 8 section.
More concrete evidence is that the windows8 update.js command explicitly looks for a "windows phone" project and then throws the error you are seeing. I use quotes because it does this by checking for a .csproj file in the windows8 directory.
I tried rigging it to work by placing a dummy.csproj file in my platforms\windows8 folder . This got me further but still failed.
The version you are upgrading from may have some bearing on the this so maybe worth a try.
update.js has not been updated (no pun intended) for a year. I'd call it a bug
I've submitted this to their bug tracker: https://issues.apache.org/jira/browse/CB-6748