This is wavelets aka JPEG2K. The problem is that 1. they don't compress well, because they look blurry which is unpleasant 2. they are inefficient to decode bec

This is wavelets aka JPEG2K. The problem is that 1. they don't compress well, because they look blurry which is unpleasant 2. they are inefficient to decode because of poor memory locality. So that's why most codecs use macroblocks instead. IIRC Ogg Vorbis also originally supported this for audio but nobody used it.