bzip2 is great if your aim is to compress files as small as possible. It's much slower than gzip and ZIP encoding, though, so for files which are frequently read from or written to, as we're dealing with here, it's inappropriate. Also, bzip2 is just a compression mechanism: you'd still need to use something like tar to archive multiple files into one file.
See the Open Office document I mentioned earlier for an explanation of why .tar.gz encoding isn't the best approach, then add the comparative slowness of bzip2 (especially for compressing files), and you've got a solution which is far from optimal.
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