these output files actually resulted in larger file sizes…
Making smaller files is not really the purpose of Basis — sometimes it will, depending on your compression settings, but it’s not always better than JPEG for size. The main goal is to reduce GPU memory (JPG and PNG textures have to be fully decompressed in GPU memory) and to have the textures upload from JS memory to GPU memory much faster, avoiding rendering freezes while loading a new texture. See the gltf-transform etc1s -h documentation for a bit more detail here.