Having checked the pdfTeX documentation, doesn't the internal parameter \pdfcompresslevel deal with this? The documentation says:
"compress level This integer parameter specifies the level of text and in-line graphics compression. pdfTEX uses zip compression as provided by zlib. A value of 0 means no compression, 1 means fastest, 9 means best, 2..8 means something in between. Just set this value to 9, unless there is a good reason to do otherwise - 0 is great for testing macros that use \pdfliteral."
The compression this parameter controls is quite different. Without compression (e.g., \pdfcompresslevel=0) a PDF file consists of almost readable text. Even images can be stored in an ASCII encoding. Setting a non-zero value for \pdfcompresslevel applies a lossless compression algorithm to objects in the pdf file.
For exactness. Primitive \pdfcompresslevel influences lossless compression of 1) content of pdf objects 2) included PNG images (they are decoded and encoded again) In case of inclusion of PDF, it is put as it is (so compresslevel is not changed). JPG is also untouched. It was valid for pdfTeX version <1.0. I have no info about changes in this case. Vit Zyka