Consider the resources required for decompression

Yes, I wouldn't personally care about 16-bit processors nowadays; but there's plenty of low-cost battery-powered IoT devices that can't afford megabytes of always-on DRAM, and I don't imagine energy efficiency will improve enough to change that any time soon. They'll probably have a (relatively) fast 32-bit core that can do plenty of sophisticated computation and data processing, but very little storage, so compression algorithms are both possible and useful.

(E.g. the "mainstream" STM32G0 series has 64MHz Cortex-M0+, and ranges from 8KB RAM / 32KB flash ($0.60 direct from ST) up to 144KB RAM / 512KB flash ($1.75).)

I wouldn't be surprised if this was becoming _more_ relevant over time, since many people see value in monitoring and controlling every device over the network, so they need more microcontrollers.