Well I have built an empty iso of around 70GB file on my ubuntu system, then converted iso to ext4 system using guide from http://freesoftwaremagazine.com/articles/create_mountable_disk_image_gnulinux/
I have checked and verified that the linux filesystem stored on iso based ext 4 file-system does indeed preserve filesystem permissions and also support incremental backup from rsync when mounted via "loop" method on your linux system.
But there is no compression, but now you have an archive file that may be carried on your usb(any file-system), while cloning your system on fly.
You may also use resize2fs command to resize(enlarge or shrink(be careful)) according to your need while using command suggested at
"Re-size" the .img for smaller SD-card. How to SHRINK a bootable SD card image.
However, ideally one must keep a static copy and a second dynamical resizable version for precaution or one can simply just use sparse img file.