I built and tried this out. I'm rather shocked to see speed and compression ratio better than gzip -9.
The results of my unscientific test (compression only):
Compressor Size Ratio Time
gzip -1 23MB 88% 1.18s
gzip -2 23MB 87% 1.38s
bzip2 23MB 87% 5.57s
xz -1 23MB 87% 5.35s
xz -9 11MB 43% 10.58s
bmz 13MB 45% 0.95s