Having media completly underwater will work (remember the undergravel?) but it will not be as efficieant as a true wet dry type filter. The major advantages of the media being out of the water is that nitrafying bacteria consume lots of oxygen, being up out of the water they have a greater amount available to them to perform better. Also (as someone else mentioned) Wet dry filters degass (oxygenate) water and remove co2. I put airstones under my bio towers to supply even more oxygen to my bio balls. The reasom that I don't use lava rock is because it traps debris and you may end up with water quality problems in the future (mostly nitrates and perhaps cronic low Ph issues) Lava rock does have lots of surface area for bacteria to colonize on but it will clog and loose it's ability to perform properly. Bio balls don't hold debris very well when maintained correctly. I have system that have run for 5+ years without ever disturbing the bio balls. As long as the water is very efficently pre-filtered prior to getting to the bio balls, they won't need any attention. I also believe they degass better than lava rock or simular. Just my .02
Joel