Originally posted by boardhead makes it even more surprising that they don't give you any control over the quality of this image.
boardhead, I can imagine situations where you want better quality embedded JPGs, like when using certain image archiving software.
For the current situation, how large is the PEF and how large is the embedded JPG after extraction in DCU?
I assume there must be rewriting software which touches all raws in a folder and rewrites the embedded JPGs with better quality versions. At least for DNG. Did you check? AFAIK, one could even use LR to do just that, incl. a conversion of PEF with low quality JPG to DNG with high quality JPG.
As for a firmware option, it would be hard to convince Pentax that there is enough demand for it. But of course, it would be nice to be able to tweak raw file size, incl. an option to control embedded JPG size and bit depth. Starting at 24MP, even an option for reduced size raw files (6MP sRAW) or lossy compressed raw will probably become interesting.