In another post, I have uploaded and documented a minirt init modification handling cloop and squashfs transparently for the user, just using cheatcode "squashfs". It's for pure 64-bits, but the modification for 32-bits is trivial.
IMHO, present day squashfs seems to be about as stable, efficient and versatile as we need for this kind of use, and its widespread and growing use indicates others think the same.
So, with a "uni-minirt", KNOPPIX may still be distributed as cloop image, but subsequent remasterings will not have to unpack minirt.gz to make modifications in order to turn to squashfs. I think lots of remasterers will prefer squashfs, as it gives (at least) slightly simpler and faster workflow with at least as good results. OTOH. I can't see anything right now forcing us to use squashfs.
And, just for the record: This is not about the practicality or usability of cloop per se, but about the actual Knoppix use case.
VINTAGE NEC Versa Model 5060X Pentium mmx *Untested* #F2
$67.05
Vintage SUNSOFT 2.4 SOLARIS X86 New
$199.99
Vintage Asus CUV4X Socket 370 Motherboard + Pentium III 866 MHz + 128mb RAM
$74.99
Vintage iPod Installation Software CD 2005 2Z691-5547 A
$11.64
BlueSCSI V2 WiFi (Desktop) Modern Storage for Vintage Computers Latest Model
$53.50
BlueSCSI V2 WiFi (Narrow DB25) - Modern Storage for Vintage Computers
$51.50
Vintage 1999 MicroSpeed Micro Trac Trackball Mouse PD600-9312
$14.99
Vintage Dot Matrix Printer Contin Feed Paper 8.5 x 11. Lots of 5 to 250 sheets.
$4.00
Vintage S. C. E. Data Transfer Switch Input Output A/B Pre-Owned
$30.00
Vintage Collectible Computer Gold Chip- WDC 1979 FD1797A-02 8312 16
$99.00