From Wikipedia:
http://en.wikipedia.org/wiki/DjVu
DjVu (pronounced like déjà vu) is a computer file format designed primarily to store scanned documents, especially those containing a combination of text, line drawings, and photographs. It uses technologies such as image layer separation of text and background/images, progressive loading, arithmetic coding, and lossy compression for bitonal (monochrome) images. This allows for high-quality, readable images to be stored in a minimum of space, so that they can be made available on the web.
DjVu has been promoted as an alternative[2] to PDF, as it gives smaller files than PDF for most scanned documents. The DjVu developers report[3] that color magazine pages compress to 40–70 kB, black and white technical papers compress to 15–40 kB, and ancient manuscripts compress to around 100 kB; a satisfactory JPEG image typically requires 500 kB. Like PDF, DjVu can contain an OCR text layer, making it easy to perform cut and paste and text search operations....
Based on the technical information it looks like the pages are stored as images. That's why converting to PDF makes such huge files -- almost everything ends up being rendered as a graphic..
According to that wiki page the format and code are "open". There hasn't been any update to the program/spec on that page since July 2006(?)
The main project/resource site at
http://www.djvu.org/ does seem active. But I didn't see any source code there.
From what I see here at this sourceforge site
http://djvu.sourceforge.net/gsdjvu.html the regular project source might be slightly encumbered , but this site has its own GPL version.
So..... I guess there's no reason (other than developer time) why the edge couldn't do djv files from a licensing point of view.
I found this page which is supposed to be an Android Djvu viewer:
http://code.google.com/p/djvudroid/