A precompiled application has already had it's code (C#) compiled into DLLs. There are a few options with ASP.NET precompilation that may allow you to update the site, but it will be difficult to change any of the C# with a precompiled version. If the site was precompiled with the "Updateable" flag set to true, you can update .aspx (Web Forms) and .ascx (User Control) files. You don't need to do a full build for these updates to show on your site, just Save them and view in browser.
If updateable was NOT set to true, these files will have all also been compiled into DLLs and there isn't much you can do. If you just need to look at the code and not update anything, there's a way to find which DLLs each .aspx and .ascx was compiled to and you can use reflection (.NET Reflector or similar) to investigate further.
The reason you get the error is because the site has already been compiled and therefore can't be recompiled.