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Games these days simply really are thát bloated.
Also compression only goes so far... It's not like file sizes can always be halved with it.
Unfortunately, these methods of compression are highly computational, and therefore significantly affect performance in a negative way.
There is perhaps benefit to some minor compression with small computational footprint, that can allow more data to travel quickly over a data bus like PCI-Express.
Otherwise you're trading download bandwidth for compute bandwidth. There might not be a significant difference in time at the end, just whether the burden disproportionately affects your entire household or just you. With Gigabit availability seeming to outpace the typical bandwidth of an individual device, the impact may not even affect other members of your household.
Another consideration is that higher levels of compression are more prone to corruption, and are generally considered to be an unsafe storage method. A single bit lost under uncompressed status might not ever be noticed, while a single bit lost under excessive compression might render the entire file lost.
There is perhaps YouTube's consideration towards video optimization as an industry leader.
Other than that, what CJM said
Compression techniques are constantly improving, although I guess there is a limit. When I went to university our lecturer was currently working on a doctorate's in data compression, and that was in 1999.
Either way you get hit with the same stick.
Valve only distributes games in the exact format that the developers provide to their servers. They do use compression to reduce bandwidth usage, but it is a lossless algorithm that is unpacked into the game's original format.