Texture compression isn't just for smaller downloads. In fact JPEG is fine for reducing download sizes. However, when the JPEG is converted to a texture it is completely decompressed. Texture compression formats aren't as good at compression as JPEG, but they are specially designed so that they never need to be decompressed; they remain compressed in graphics memory and the GPU decodes them on the fly as they are sampled. Not only does this save graphics memory, it also saves memory bandwidth, which actually makes rendering faster.
Given this, it makes sense to store your textures as JPEG and convert them to compressed textures at load time. That way you get the excellent compression ratio of JPEG for the download and the speed boost of compressed textures for rendering. For example, id Tech 5 (RAGE) does this for their megatextures (except they use JPEG XR instead of JPEG).
Given this, it makes sense to store your textures as JPEG and convert them to compressed textures at load time. That way you get the excellent compression ratio of JPEG for the download and the speed boost of compressed textures for rendering. For example, id Tech 5 (RAGE) does this for their megatextures (except they use JPEG XR instead of JPEG).