I use xz on my A1200 all of the time, and Amiga is the stereotypical system where maximum possible compression matters over everything else. Don't make assumptions about me.
Because my Amiga: volume is actually an NFS share on my Solaris 10 central storage server in the basement. With xz(1) I'm easily portable across systems.
And you're talking to a guy who had his C128D spend all nights crunching intros + pic + game at 1 MHz in Cruel Cruncher 2.5+ and Time Cruncher 5.0 before that. xz(1) on a MC68030 or the Vampire is super fast in comparison.