Is poetry the most compressed form of literature?
Poetry often does pack a great deal of meaning into carefully chosen words. It therefore is often a compressed form of literature.
However, note that poetical form can entail more words than would otherwise be necessary. The form of poetry might require repetition or parallelism resulting in some level of redundancy in terms of communication. Such repetition or parallelism may be helpful in terms of emotional impact or memorability, but removing it may well not compromise the status of the text as "literature".