I think you made a typo there

as seen on:
http://blog.davepoon.net/2015/01/19/setting-up-sass-with-jekyll/
http://markdotto.com/2014/09/25/sass-and-jekyll/#create-a-sass-stylesheet

site/_docs/assets.md

@@ -73,7 +73,7 @@ You may also specify the output style with the `style` option in your
 
 {% highlight yaml %}
 sass:
-    style: :compressed
+    style: compressed
 {% endhighlight %}
 
 These are passed to Sass, so any output style options Sass supports are valid