The Linux distros are generally expecting that the hardware supports compressed

Sure, but that’s a single configuration option away from being changed if the hardware is altered.

Not really, it requires everything to be recompiled, which takes a few weeks assuming you have access to the cluster of RISC-V machines required to do it. We (Fedora) have rejected one platform already that wasn't going to support the compressed extension.

Why would you need to do the builds natively instead of cross compiled?

The whole toolchain just makes this assumption, and we want to build it the same way Fedora is built for other arches. Plus we're expecting server-class RISC-V hardware soon enough, at least comparable to ARM servers.