Include more apps
I don't want more apps. I'm already uninstalling a bunch of unwanted apps and bulky libraries they depend on after a fresh install. Why should I have to download them just to have to get rid of them? Adding apps from repos is easy and results in less wasted bandwidth.
Sure, I install a lot of extra apps that aren't currently ubuntu-desktop deps. But they're probably not the same ones you install.
they don't include VLC because it doesn't fit so instead they include Totem which is a much worse player.
Well that's very much a matter of opinion. VLC's a great player, in particular for its format support, but Totem, as a standard part of the GNOME desktop, fits the UI much better. All the Gstreamer stuff is coming along anyway, so installing the comparatively small Totem front-end is a no-brainer.
So I install VLC, yes, but could I claim it's an essential for the average desktop user? No. Indeed, parts of its interface, like the playlist, are pretty clumsy and newbie-hostile.
Live CD and Instalation would be faster, since they wouldn't need compression at all
The installation process is disk IO-bound. The CPU usage from decompression is not a bottleneck.