Very good point to make.

I think you can make a valid analogy between

DNA, biochemistry, and the physical forms of all animals and plants etc,

with

An encrypted hash (or lossless compression), the encryption/compression algorithm, and the thing that was encrypted/compressed.

The difference as you rightly point out is that we produce the hash from the desired end result 'encode' videos and images etc,

Whereas DNA evolves by the reverse process: with random hashes and if something useful emerges from that then the DNA gets kept and then adapted with more random changes that get kept or discarded.

Nevertheless, the end result is the same: a compressed/encrypted file that, with the application of the correct algorithm, can produce the entity in question. In that sense, 'encoded' is a valid verb for DNA: our physical forms are encoded within our DNA the algorithm is not reversible and never needed to be.