Me too!! It's a huge pet peeve. And it's so hard to get people to see how it's linguistically AND mathematically WRONG.
Idioms don't have to make literal sense or be linguistically/mathematically correct to be useful. All that matters is that other people know exactly what you mean when you say it.
And, pretty much universally, if I tell someone "the compressed file is 10x smaller than the original", they are going to know what I mean is that the byte size is 10% of the size of the original.
That makes it an idiom that is perfectly okay for everyday use.