I would agree that using, say, zlib style compression would be a better idea as it would allow for more TPS than the current JSON but would not be as tricky (i.e. stuff like "endian") as binary.

I think 1000+ TPS is the eventual goal - but hey Bitcoin doesn't even do its currently max. 7 TPS at the moment (so no great hurry to get there). Even 100 TPS would put Nxt well ahead of the pack.