Seems like a bad idea.
Some other miner could finish solving and broadcast a block during the time a miner wastes compressing the block. Then the miner is sitting on a worthless compressed orphan block.
Seems it would be better to have a protocol that allows the miner to just broadcast the 80 byte header, then the merkle tree.
Since most peers will already have most transactions, there's no need to re-broadcast the entire megabyte worth of them (compressed or otherwise). Then peers can just request any transactions they are missing from their immediate peers.
zipping a few MBs has got to be a less then 1 second operation no?
but just sending the header, and merkle tree, would require even less bandwidth than sending the the hole block zipped.
so there you go, bitcoin can have GB blocks without requiring miners to use a huge amount of bandwidth propagate these huge blocks
miners would simply be required to keep up with the TPS.