Diffs must contain enough information to make it possible to patch a version into another, so yes, for your experiment of a single-line change to a very small document, storing the whole documents could be cheaper.

Library functions return iterators to make it easier on clients that are tight on memory or only need to look at part of the resulting sequence. It's ok in Python because every iterator can be converted to a list with a very short list(an_iterator) expression.

Most differencing is done on lines of text, but it is possible to go down to the char-by-char, and difflib does it. Take a look at the Differ class of object in difflib.

The examples all over the place use human-friendly output, but the diffs are managed internally in a much more compact, computer-friendly way. Also, diffs usually contain redundant information (like the text of a line to delete) to make patching and merging changes safe. The redundancy can be removed by your own code, if you feel comfortable with that.

I just read that difflib opts for least-surprise in favor of optimality, which is something I won't argue against. There are well known algorithms that are fast at producing a minimum set of changes.

I once coded a generic diffing engine along with one of the optimum algorithms in about 1250 lines of Java (JRCS). It works for any sequence of elements that can be compared for equality. If you want to build your own solution, I think that a translation/reimplementation of JRCS should take no more than 300 lines of Python.

Processing the output produced by difflib to make it more compact is also an option. This is an example from a small files with three changes (an addition, a change, and a deletion):

---  
+++  
@@ -7,0 +7,1 @@
+aaaaa
@@ -9,1 +10,1 @@
-c= 0
+c= 1
@@ -15,1 +16,0 @@
-    m = re.match(code_re, text)

What the patch says can be easily condensed to:

+7,1 
aaaaa
-9,1 
+10,1
c= 1
-15,1

For your own example the condensed output would be:

-8,1
+9,1
print "The end"

For safety, leaving in a leading marker ('>') for lines that must be inserted might be a good idea.

-8,1
+9,1
>print "The end"

Is that closer to what you need?

This is a simple function to do the compacting. You'll have to write your own code to apply the patch in that format, but it should be straightforward.

def compact_a_unidiff(s):
    s = [l for l in s if l[0] in ('+','@')]
    result = []
    for l in s:
        if l.startswith('++'):
            continue
        elif l.startswith('+'):
            result.append('>'+ l[1:])
        else:
            del_cmd, add_cmd = l[3:-3].split()
            del_pair, add_pair = (c.split(',') for c in (del_cmd,add_cmd))
            if del_pair[1]  != '0':
                result.append(del_cmd)
            if add_pair[1] != '0':
                result.append(add_cmd)
    return result