Compressionism is often used by LEGO train fans. This is mainly due to the small radius of the LEGO train curved track. Some models are therefore selectively compressed in length in order to, for instance, not be overhang too much when going around curves. This also helps pulling capacity as there is a limit to the amount of load the magnets can pull and stay connected.
Compressionism is also used in other themes, but it is more common to selectively compress in more than one dimension (reduce the stories and the footprint of a skyscraper or castle, for example).
When Walt Disney built his original theme park in California he used compressionsim to create an illusion for visitors. By building the second and higher levels of buildings shorter than the ground floor he created an illusion of extra height for viewers on the street.
This can be used to great effect in town creations. Second and higher levels of buildings can be built shorter than the ground floor. This saves on the amount of brick required and can be used to force perspective.