So if compression not only saves space, but increases performance, it seems like its past due for disk manufacturers to actually include compression in disk controllers.
This is potentially true, but it's not a slam dunk because CPUs may be much more powerful than whatever you can build into a disk controller cost-effectively. This may not be true (a high-performance ASIC implementation may be tiny; this is not unheard of in the world of bit-banging algorithms), but it is worth considering. I'll have to look into what compression algorithm they used, and whether you can get away with something smaller/less power-hungry than a Core 2 on a disk controller.
How and where you do the compression matters. ZFS compression appears to be much more efficient than ext2 or NTFS compression due to the copy-on-write nature of ZFS. It would be difficult for a disk controller to implement the same optimizations.
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