You can still get the compression benefits by serving files with Content-Encoding: gzip or whatever. Though it has builtin compression, you can just not use that and use external compression instead, especially over the wire.
It's pretty widely used, though often dressed up as something else. JAR files or APK files or whatever.
I think the articles complaints about lacking unix access rights and metadata is a bit strange. That seems like a feature more than a bug, as I wouldn't expect this to be something that transfers between machines. I don't want to unpack an archive and have to scrutinize it for files with o+rxst permissions, or have their creation date be anything other than when I unpacked them.