I'd rather we didn't serve poor quality images to all our users. This is a poorer user experience in my opinion. if I understand correctly this change was more to encourage more providers to join zero by providing an incentive of Zero users using less data. I'm still not convinced there is a huge benefit to the user themselves when you consider gzipping etc. Have you benchmarked and documented how this change effects load time? Pulling in Ori and Aaron since they should have expertise in this area.

A lot of browsers these days allow you to turn off images altogether and I think if a user you'd rather do this then receive poorer quality images. To me it's a binary switch - no images or images... On retina displays we actually go the opposite direction and pull in better quality images. I would hazard a guess that the issue here is the number of http requests rather than the size of the images.

I think if we wanted to invest any time in this sort of thing we should explore deferring the load of images until they are visible (we dabbled with this when we explore lazy loading sections) [1]. It would be interesting to rewrite any image after the first heading to be a link to the image and pull it in via JavaScript when it is scrolled into view. I think this would give us more bang for our buck...

On a side notice I notice all images on mobile are missing a cache expiration  - is that intended? Also have we considered adding a header Cache-Control: public to them?

[1] http://24ways.org/2010/speed-up-your-site-with-delayed-content/