Anyone who knows anything about compression knows that universal lossless compression is impossible to always do, because if such an algorithm existed, you could run it repeatedly on a data source until you were down to a single bit. And uncompresing a single bit that could be literally anything is problematic.
Actually, anyone who knows anything about compression knows that universal lossless compression is always possible to do. Sometimes you get good compression, sometimes you get shitty compression, and sometimes you get 0% compression. Note that 0% compression is still compression — it's just a degenerate case.
You are right, of course, that you can't repeatedly compress something down to a single bit — there is always a point of diminishing returns. But just because you can't compress something down to a single bit doesn't mean that no universal lossless compression algorithm exists. For example, f(x) = x is a universal lossless compression algorithm. It's a shitty algorithm, but it is lossless and it does compress.