Decompression speed is indeed important, but so is compression ratio. So any choice in this matter will likely weigh in all factors and I guess that for package distribution, compression speed is the least important factor as it is not something which affects end users. Compression on the other hand affects the time it takes to recieve the packages and decompression speed affects the time it takes to install them once they are downloaded.
Originally Posted by chithanh
So a solution which provides great compression and great decompression speed is likely a prime candidate. On my machines the packages I get from the Arch repos (xz compressed) unpack and install very quickly but then again I have a core i5 and a core i7 so it's hard for me to judge how effective it is overall.
Still, lzma should have proved itself as striking a good balance between compression/decompression speed and compression ratio given that it is used in so many compression tools.