You're kind of thinking of the "source code" for electronic music.
To simplify things: You start with a sequence of notes stored as MIDI, which are played through synthesizers and sampled instruments, which generate the sounds. Then you layer effects on top of that, such as reverb, filters, and compression.
Distributing this "source code" probably wouldn't make music files any smaller, since you would also need to distribute all of the sample packs and effects plugins. A single reverb or compression plugin will take up tens of megabytes. Acoustic instruments are usually sampled at very high quality. A grand piano library can be gigabytes of samples, which includes all kinds of variations for velocity, acoustic response, etc.
In addition to that, anything you record with a microphone can't be compressed in this way, such as vocals, or any acoustic instruments. So if you have vocals throughout the whole song, then the entire length of this audio track will have to compressed at the original bitrate anyway. So if you have a 3 minute song that uses lots of samples, but also has 3 minutes of vocals, then the vocals are your bottleneck. Whatever you do to split up your track into samples, your minimum filesize will be 3 minutes of compressed audio.
So as soon as you have anything that can't be reduced into repeating samples + filters, you won't be able to do better than MP3 or FLAC (for lossless compression).
If your song contains very little recorded audio, and is purely MIDI + synthesizers, then this technique could save a lot of space.