imo VDO makes sense where you deal with high speed, low capacity media. I've used BTRFS compression to hold huge disk images in RAM or an SSD while I fully strip/TRIM and repack them (say from RAW to qcow2 or similar). Of course this is usually a case in which I've imported a physical disk image of a 500GB drive, but the actual data on it was only ~50GB or less.

Edit: Sorry not the disk image, the temporary overlay for zero blanking. But sometimes smaller disk images for the whole thing.

Recently I've also experimentally been holding some older games in RAM on a compressed image.