It's hard and it particularly slows down the asset production process which is already a disproportionately slow and expensive part of development. Way easier to let the artists go apeshit exporting everything at 8k and a billion polygons because storage is cheap in a production environment.
Compression could help in theory, but then you'd have to decompress assets on the fly which takes a significant amount of processing power. The industry is trying to reduce the latency of getting assets into memory, compression would be moving the other way from that.
If you're conspiratorially minded then you might also conclude that it's to prevent people from having another major live service game installed on base model consoles, making you more likely to keep playing the one you've already installed. A kind of walled garden effect.
I mean I get that decompression can be expensive, but there's nothing stopping them from having a base version of the game with smaller lower quality assets and allowing players that want to download the huge assets do so with a free dlc. Many games have done this in the past.
Nothing except the work of creating lower quality assets and splitting off the HD stuff into a separate download. Totally doable and I'd love to see it, but I doubt studios will commit the man hours unless they can be convinced that it will really make the game sell better.
Why decompress on the fly? For a lot of things the crazy high-res textures aren't needed or appreciated while playing. I downloaded some newer FTP Quake title. It had 30 fucking GB for like a dozen maps or so. It is a god damn arena shooter. You are way to busy jumping around, making fast paced shots and so on, to ever appreciate that the texture is still detailed, when you are pressing your virtual face against ist. And it takes so much more ressources because the texture needs to be loaded in the VRAM and then scaled down anyways because you aren't pressing your face against it.