I disagree, image compression is still highly relevant and will stay relevant for a long time. It’s not about hosting costs and hosting bandwidth, it’s about user bandwidth.
I frequently travel between countries by train and bus and when outside cities it’s almost impossible to get any non-optimized page to load. And this doesn’t even only extend to the time spent inside the train. Depending on the country (all developed) and which phone operator my phone decides to switch to, I have slow mobile internet about half of the time. This is also one of the reasons why I prefer to read HN over other sites: HN loads, others don’t.
Most images on a modern website don’t really contribute anything substantial but are merely decorative. Image quality loss should therefore not be a problem for ~90% of images.