Hi Zach,
The reason against JPEG is primarily because of the corruption capabilities. If the first packet is not received (which is often the case), the entire image will be corrupt. If a single packet is missed, it ruins the image for all of the packets after.
Multiple satellites use raw JPEG in space currently, and it is not working well.'
A better format to use would be SSDV (
https://github.com/fsphil/ssdv), which has been tested on HAB flights for a long time, and was originally implemented on an Atmega328!
It retains the JPEG compression capabilities, while simultaneously protecting the imagery against potential packet loss.
There were only three satellites that I know of that used SSDV in space, that is, GASPACS-1 and the Chinese Lunar Orbiter cubesats a while ago.