Having it loosely packed allows me to distribute it in the media chamber a bit better. The bag helps me to keep some semblance of control over where this stuff goes. The old time method with carbon and floss was to discard only half of the dirty floss at maintenance time so as to maintain biological filtration. Due to the relatively small size of the media chamber, commercial bio media that comes in small pieces are best. BioChem Beads, Efisubstrat, Seachem Matrix, etc. fit this bill.
Some people even use gravel.
However, unless you put these in a filter bag, you may find them hard to manage come maintenance time. It allows for the media to be distributed about the chamber, while also allowing fast removal. This can be achieved by fitting a longer lift tube to the top of the filter where the bubbles come out. The problem is getting a tube that fits. The Marineland Maxi-flow also offers this.