Yes, thank you for pointing this out. To be more precise about it:

    Original PNG:    1310987 bytes
    Lossy PNG:       1154386 bytes (90.4% of LZ4i)
    Lossy LZ4i:      1276477 bytes
    More Lossy PNG:   693278 bytes
    More Lossy LZ4i:  818774 bytes (84.7% of LZ4i)

So it's notable that this lossy PNG technique has diminishing returns for LZ4i - it actually becomes more effective as a PNG preprocessor as you get more lossy, relative to LZ4i!

Still, there's a decent argument that PNG is no longer Pareto-optimal. There's stuff that gets close to the same compression ratio but decompresses much faster, and there's stuff that compresses much better and is also lossless, e.g. JPEG-XL lossless mode.