Having a fast malloc less compression library is extremely useful in resource constrained embedded systems world, where either memory usage should be minimized (you can still run modern Linux kernels on systems with 32MB of RAM, probably less), or where traditional memory management isn't available, such as a microcontroller.

In the microcontroller case you can get a 32bit ARM Cortex M0 for $2.00 qty 1 these days, allowing the bit-twiddling you find in compression libraries to compile successfully. Having a fast malloc-safe compression library is extremely useful. lz4 is an example of one which you can run on a microcontroller successfully, but isn't as compatible as zlib is.