ibins By pushing the options, with HEVC for example, let's take for example a UHD bluray whose film is 60GB, it is very largely possible to make it fit on 15GB with a quality loss lower than 5% (thus an insignificant loss).
Imagine to have 100 movies like that, it would require 6Tb in untouched against 1,5Tb in compressed, which allows either to have more files on the HDD, or to buy a smaller HDD and therefore less money.
Yes, HDD's are cheaper now (although, for more than a year, prices have gone up, even if they tend to come back to normal, but not quite yet).
Personally, I'm on a nas 7 bay with 7 HDD of 14Tb, it's far from being as low priced as you say.
Anyway, there are pros and cons on both sides, but personally, depending on the files, I do not see why he should refrain from re-encoding them.
The only thing after that is to have a good cpu and time to do all this in good condition.
Translated with www.DeepL.com/Translator (free version)