ps2pdf usually makes files smaller, but the attached example is 832,319 bytes, and ps2pdf produces a 2,510,111 byte result. The resulting file also has some loss of image quality. The example is from http://code.google.com/p/pdfsizeopt/ That application produces a 317,328 pdf with no loss of quality (confirmed by running pdfimages from xpdf and comparing the 183 extracted images).
Created attachment 6132 [details] the original pdf
Created attachment 6133 [details] 300 KB pdf produced by pdfsizeopt http://code.google.com/p/pdfsizeopt/
The original PDF file makes quite extensive use of Form XObjects. pdfwrite currently doesn't support output of Form XObjects (except for certain classes of transparency) so each time a Form is encountered its content atream is written to the output file. This is essentially a duplicate of #691202 *** This bug has been marked as a duplicate of bug 691202 ***