It's more likely that the devs are not being given the time or resources to do this kind of thing properly. Their bosses are too concerned with what will save money and generate shareholder value.

I wouldn't really say that. The kind of extreme compression Fitgirl does comes with the tradeoff of really long decompression times. Depending on which games, nearly 45 minutes (with a 7800x3D)

Some games lack compression but I would not want those long install times by default, if you have a speedy internet connection they usually take longer to install than to download. Don't get me wrong, for people with really slow internet those repacks are a godsend but they are not "better" on every aspect.

The thing about compression is you have to process it to decompress it. It may be benificial to people with limited bandwidth, or for peer-to-peer sharing, but it's probably better for most users for someone like Valve to share the uncompressed version. Bandwidth isn't the issue it used to be.

It also makes progressive updates harder. The best you can do is compress each update individually, not the whole package.

do an extremely bad job at basic tasks like compression

I've installed one game from FitGirl so far. It took three hours to unpack while hammering all the cpu cores, failed, and required another three-hour go to install properly.

So you're saying that all games should install like this?

No it's making a choice. Faster decompress times. Considering a lot of their customers have fast speeds it doesn't really matter.

A lot of devs stopped giving a flying fuck to disk space and performance a long time ago. "32GB of RAM and 500GB of disk space? Don't mind if I do!" - for a pixel art 2D platformer

The EA/Ubisoft/Rockstar servers are so shit and their games so large that it's actually near impossible to download their games on a slow internet connection, because they would just timeout after 3~4 hours.

Downloading a cracked, compressed FitGirl repack over P2P and just ignoring the crack was unironically the only viable way to legally enjoy the games I had purchased back when I had slow internet.

The repacks are windows .exes, yet even work flawlessly via wine. FitGirl truly GOATed.

The downside of the compression is the install can take way longer than the download. But if you're on a slower connection the smaller download would be a big benefit.