Interesting observations on compression. As a young programmer, I used to compress executables, and maybe some DLLs as well, with UPX without a second thought. Later I understood that executable compressors prevented the OS's memory-mapped file I/O and demand paging from working as designed, and moved to only compressing the installer and update packages (another of my misadventures as a young programmer was doing my own updater with its own package file format).

I guess the ideal solution would be if the download server offered a few compression options negotiable at download time, via Content-Transfer-Encoding or some other form of HTTP content negotiation, trading CPU time against bandwidth (the server would have to pre-compress or at least cache the compressed versions to scale), and then the download was stored as some kind of archive that could be mounted as a filesystem (this implies random access and therefore not "solid" compression). Then delta updates would be done against that filesystem image. That way, you wouldn't have the "installing" process of uncompressing and copying files. Of course, that would require platform support that we don't have on Windows and macOS. At least I can dream about desktop Linux.