The real problem is that people use JPG for everything, not that JPG is widely used.
If you compress an image into a JPEG with a quality parameter of 100, it still won't be identical to the original image.
Do Ceiling cats need to be rendered in perfect color ? No. Does it matter if that lame photoshop of Dick Cheney's head on a giraffe has messed up compression artifacts ? No. I can haz cheezburger is just as funny with whatever stupid encoding you go with as long as it renders.
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