As a technical note, it's not compression, but limiting and compression. Limiting chops off the dynamic peaks and then compression is used to raise the average signal strength.
The modern loudness wars was the result of iTunes type random order playlists becoming the dominant listening format. Artists, engineers and record labels did not want their songs to sound softer (less impactful) than the songs that came before or after them on a playlist. It's not really different than what happened to AM radio in the 1960s, just different technology. Early Motown was considered highly compressed (loud) for its time and other labels tried to be as loud.
The modern loudness wars was the result of iTunes type random order playlists becoming the dominant listening format. Artists, engineers and record labels did not want their songs to sound softer (less impactful) than the songs that came before or after them on a playlist. It's not really different than what happened to AM radio in the 1960s, just different technology. Early Motown was considered highly compressed (loud) for its time and other labels tried to be as loud.