In OpenWrt 19.07, the block size was increased to 1024KiB for "tiny"
devices by default to save flash. Unfortunately, this also significantly
increases the cache memory required by squashfs.

In my test, the increased block size reduced the image size by ~64KiB,
but increased the RAM usage by ~2.6MiB. As most tiny devices have only
32MiB of RAM, this is not a reasonable tradeoff.

The ar71xx-generic target already defines an even lower block size of
64KiB.