KML is linked. It is self-descriptive, and can rely entirely on following of links to obtain more information, whether that is styles or additional data.
If this were uncommon, it wouldn’t be such a shame; it’s certainly possible to distribute data like this for use cases where it is necessary, including offline use and other use cases. However, this is not a limited situation — in fact, more than 80% of KML made available on the web tends to be primarily available as KMZ. This packaging of KML leaves much to be desired, and limits the use of such data in web-based tools.
The web already has ways to compress data — gzip-based compression is common on many web servers (a tradeoff of CPU time for bandwidth), and works fine in all KML clients I’m aware of (including Google Earth and Google Maps). This lets your data exist on the web of resources and documents, rather than in a zipped up bundle.
My interest in this matter should be obvious: I work with mapping on the web. Ideally, I work with tools that don’t require server-side code — every piece of server side code you have to build is another heavy requirements placed on the users of any software. Browsers, as a common platform across which developers can code, are a worthwhile target, and trapping your data in KMZ hides it from browsers.
Free your KML! Publish on the Web! Don’t use KMZ!