Saying a game or movie "filled up a disc" is a bit of misnomer. You're always going to try to use all the space you have, it just means using less compression. The question is are you going to lose any quality by using more compression. Take an image file for example. A 1024x1024 uncompressed image is going to be about 4mb. If I go to save out that same file as a jpg at the highest setting in Photoshop (setting 12) it already drops to about 800k (varies depending on the image), but if I drop the quality down to about 9 the same 4meg file is only about 200k and you're really not going to see any difference in quality.
If you didn't have to compress it though, because you have the room and your engine will handle it, then why would you waste the time? Just let the images be 4megs and save yourself the time.
It's the same thing with movies, sure ANY movie could be encoded to take up the entire 50gigs of a Blu-ray disc but the law of diminishing returns means that the same movie encoded to take up 10gigs might look almost no different. The more compression though, the longer it takes to encode. So it's the same tradeoff.
