I’ve wondered about this as well, like most clients should be capable of still doing a bit of compositing. Like if you sent billboard renders of background objects at lower fidelity/frequency than foreground characters, updated hud objects with priority and using codecs that prioritize clarity, etc.

It was always shocking to me that Stadia was literally making their own games in house and somehow the end result was still just a streamed video and the latency gains were supposed to come from edge deployed gpus and a wifi-connected controller.

Then again, maybe they tried some of this stuff and the gains weren't worth it relative to battle-tested video codecs.