Indeed. This is why the tar format explicitly allows garbage data at the end. So then people started pondering all of the nifty or clever things they could do with tar files. And they didn't want to give it up when they started compressing the tar files.

Couldn't you just reverse the order then, and create an xz.tar? Maybe I don't understand the benefit of taring the data first.

Tar is just bundling into a single file AFAIK. There is a slight benefit depending on your compression tool to tar and then compress, because (AFAIK again)some tools compress files individually and then write them into a hierarchical file(I guess this is what xz does as well, since it's searchable?). If you tar first, these tools will work better, since they encode patterns found in all files instead if doing it per file(which means e.g. if there is a header once per file, that will get compressed in the tar.comorpress, not in the . compress)

I've created sortedtar Brewster if this assumption and while it is correct tree benefit is mostly negligible except for some edge cases.