BobbyG

I prefer a rear rack, and commute with a backpack on the rack, except on my old rackless roadbike, then I wear the backpack.

But I can see that for rough, off-road bike touring, or when frame and fork suspension systems are used it would be advantageous to use a frame bag.

Then there's the issue of weight distribution, which comes down to personal preference. On my MTB-based commuter I have a rack and Wald folding baskets, and have carried heavy loads in both baskets with my usual backpack on the rack which made the handling a little "funny". Some swear by front porteur racks for their backpacks, but, depending on frame and fork geometry, at some point there is a compromise. A traditional touring setup with front and rear panniers may distribute weight more evenly, but compromises ground clearance, and combines the potential handling problems of loading the front fork with weight with placing that weight at the polar ends of the bike.

A frame bag places the weight within the bike's wheelbase, where it would probably feel more stable and natural, although it would raise the center of gravity higher than panniers would. Also, you can conceivably reach into a frame bag while riding, although that may not be the smartest move in traffic or demanding terrain, or if you can't risk dropping something.

All-in-all though I suspect the main reason for using a frame bag along with a carradice-style bag slung-high off the rear of the saddle, along with a front porteur rack or front handlebar bag is to keep the wheels as free and clear as possible, while also keeping the bags further away from potential mud and dirt, while also allowing for frame and fork suspension travel.