Both ways are in the name of beneficial bacteria and biological filtration. The theory with the bio balls, or bio pads on filters, is to establish a path of waterflow which comes into contact with "good" bacteria to complete the nitrogen cycle (that is amonia which is utterly toxic gets converted to nitrites, which is very toxic, and then gets converted less toxic nitrates). Even though nitrates are less toxic they are the limiting factor in establishing a reef tank. The bio balls or pads will breakdown in the way of the bacteria being removed (replacing the pads after a while) or just die off, and the nitrogen cycle is not complete, hence leaching into your tank. I believe that if you have a fish only tank, bioballs are not a huge problem, the fish (depending on the species) should be able to take a nominal amount of nitrates, however corals are a different story.
