I wouldn't have thought that large omnibus editions would be a problem on modern e-readers, but I did start to have trouble in the later books in the A Series of Unfortunate Events omnibus (13 books, although many of them rather short).
It was okay to start with, but if I recall correctly, my Paperwhite (which has under 300 regular not-very-large books on it) started showing minor but definite issues about eight or nine books into the omnibus - slightly slower to open (when returning to it from another book), but more irritatingly, noticeably slower page turns and problems when turning pages, sometimes hopping two pages forward or moving back instead of forward.
I haven't had any such issues with other books either before or after, while the issues, while minor, were consistent and constant with that omnibus, getting worse the further towards the end I got.
It did surprise me, as the file itself - in file size - wasn't even that large: under 9 MB.
Of course, that's just one person's experience with one omnibus, but it did make me wary of very large omnibus editions in general.
As for the topic in general, I would also prefer separate books in a "bundle" (not the least because I don't always or even usually read through an entire series all at once, and also as I keep track of read and unread books in Calibre with tags, it's much easier to mark separate books read or unread), but I recognise that when I buy an omnibus edition from a major ebook shop (e.g. Amazon or Kobo), I know that I'm going to get all the books as one file.
I've assumed DRM is a major reason, but probably not the only one - for online shops that have their own e-readers and apps, and where the possibility of buying a book straight from the reader and starting to read it right away, without needing to go through a computer at all, is a major sales point, there's just no way they'd sell a zip file containing several books instead. And neither Kobo nor Amazon seems to be set up to allow buying more than one book in one transaction.
I've been too lazy to split them, so far, especially as I don't really buy omnibus editions that often, but I know it's an option.
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