Pyjamas is a compiler - it's a specialist tool that focusses specifically on the job of turning python into javascript. It does not include "compression" technology. That task is done by specialist technology such as the "YUI Javascript Compressor", the use of which will make it damn hard for you to debug an application as it completely trashes all of the names of functions and variables. So only make use of compressors if you absolutely have to.

Sujan Shakya has contributed a script to compress pyjs output using such a compressor (contrib/pyjscompressor.py). It reduces the output size to about 50%.

HTTP 1.1 GZip Compression is usually enabled by default in both browsers and Web Servers, giving anywhere between an 8:1 and a 10:1 compression ratio in network traffic of pyjamas-compiled output. So, although the output from pyjamas looks scarily large, it's actually not as bad as it looks. 500k is not uncommon: the actual amount of network traffic can be as little as 50k to 80k, which you can verify by installing a network sniffer on your network. So, you actually get the best of both worlds: human-readable javascript and efficient transfer of your application to the users.