I think that's an unfair comparison. By using Nagle's algorithm for interactive work, you save bytes, but the software you're interacting with is that much less responsive. (If the client was responsible for echoing typed characters, then it wouldn't matter. But ssh and telnet don't work like that, unfortunately.)

So by saving bytes and leaving your pipe empty, you just suffer in user experience. Why not use something you're already paying for to make your life better?

(In the end, it seems like SSH agrees with me, and just wastes the bytes by enabling TCP_NODELAY.)