I imagine the reasons for AGS's compression are historical mainly, AGS originally ran in 256 colour mode, this is a mode jpg doesn't support, and png hadn't taken off in those days, also png and jpg are rather a lot slower to decompress than what AGS does use, which is a form of compression similar to gif, so in the old days AGS would be taking in bmp and pcx background images, and storing them in a fast (on old dos computers) and smaller form of compression.
Another reason why jpg would have been decided against was that jpg pretty much ruins things at 320x200 res, at higher resolutions, which we have now, jpg is often a better choice. If CJ were to change the internal compression format for backgrounds either switching entirely to png (which does reasonably well on all colour depths and sizes, and doesn't mess up pixels), or giving the option of storing in either png, or jpg (which does very well on what it was designed for, photo like images, many colours), would be great. Backgrounds aren't generally most of the file size of a game btw, even in high res. Ogg music and animations comprise a larger part of the filesize in games that have them, but more bg compression would still give a significant space saving. On the downside it'd introduce a small amount of lag between rooms on slow computers.
Another reason why jpg would have been decided against was that jpg pretty much ruins things at 320x200 res, at higher resolutions, which we have now, jpg is often a better choice. If CJ were to change the internal compression format for backgrounds either switching entirely to png (which does reasonably well on all colour depths and sizes, and doesn't mess up pixels), or giving the option of storing in either png, or jpg (which does very well on what it was designed for, photo like images, many colours), would be great. Backgrounds aren't generally most of the file size of a game btw, even in high res. Ogg music and animations comprise a larger part of the filesize in games that have them, but more bg compression would still give a significant space saving. On the downside it'd introduce a small amount of lag between rooms on slow computers.