During World War II, one of the Germans' major advances in magnetic recording was the use of an AC bias signal. Adding a high-frequency AC component to the recorded signal improved the linearity of the tape's direct signal response, greatly reducing distortion, but at the cost of adding hiss to what should be silent sections of the tape. In the days before modern digital signal processing, the need for linearity on portions of a signal path made tape hiss a necessary evil.
Digital signal processing, however, has obviously come a long way in the time between cassettes' popularity in the 1980s and today's resurgence. Have there been any efforts at using digitally-computed drive waveforms that would produce less hiss than conventional biasing? I wouldn't expect cassettes to achieve quite the level of performance available with compact discs, but I would expect htere's a lot of room for improvement even when using cheap oxide media.