Tbf, you aren't going to hear a lot of the 11khz+ on speech, and most of the music in HL2 is electronic and kinda centered in the low/mid range (and lower volume). It's definitely noticeable I think on weapon sounds, but noticeably better then HL1.

In terms of games generally, you have to think about the fact that while compressed files are smaller, having to decompress is more math on top of the game for the CPU to do. If it can dump it in memory and stream from there it's fine, but in some consoles that wasn't easily doable. The other factor is physical media; generally CD's or DVD's back then. It was a trade off for developers. Less so now, where discs are just tokens to enable an online download.

Compression isn't necessarily the problem. 16/22.05 WAV is going to sound alot worse then 320kbps MP3's; let alone 8/22.05