Comment I think it would be difficult (Score 1) 120
Naively, I don't think this approach would work well. Why? Storage devices work with fixed-length blocks of data at given locations. The problem with compression is that the compressed size is variable: A text file compresses well, but media, like video and audio files, are usually already compressed.
I could see an operating system working with hardware-assisted compression, but honestly, given the tradeoffs, I suspect that a bigger drive is probably cheaper and faster in the long run.