it can be used to decode things on the fly from the BD or HDD. I am not sure how good can you compress textures with deflate (zlib is an library, codec is deflate, but i guess it is easier to say zlib than deflate or something).
Basically deflate is used in PNG and you can compare PNG with BMP to see the difference between compress and uncompressed. It can be large.
So now, speed of BD is not a problem, together with all these other enhancements such as increase of RAM, increase of BD reading speed, and hardware decoder for deflate.
Essentially, it could speed things up by 2x or so, easily. Also speed access times.
Also it could enable "no installs" or superfast installs. Plus it frees up CPU from doing all this.