Compiling on ASP.Net 1.x also meant creating larger and larger assembly DLLs as the application grew. Large assemblies meant longer startup times. A significant time waster when developing large sites, especially when you're boss thinks that by forcing you to develop on a low-spec machine you'll automatically "optimize" the app as you develop (...but that's another story).
I also heard on .Net Rocks that 1.x would compile your localization data into the same assembly, making it even bigger. This would also make a trivial action like updating label text selected from ResourceManager require you to replace the whole website assembly, forxing a reload.
Today, by contrast, VS 2005 lets you put all your res files in the same folder, that gets automatically compiled as a separate dll and therefore lets you update localized text without forcing IIS to reload the entire website assembly, which can significantly help make trivial changes happen quicker and easier.