Interesting. I had known about the mosquito noise problem (as cjensen notes (and I was joking about gziping 10-bit 422)), but I didn't realize the progressive decoding was a part of the standard. I spent some time in the guts of the DCP in a previous life, and software decoding of JP2K was always a nightmare. So I'm a bit jaundiced.

But, as always, when you think an engineering decision is insane, you're probably missing the context in which the decision was made.