A coffee bag is ground coffee sealed inside a filter sachet, steeped in a mug of hot water like tea.
How good are they
Better than instant, by a wide margin, and below anything freshly ground. From a specialty roaster who nitrogen-flushes the packaging, they are genuinely pleasant — clean, recognisably origin-specific, and a real cup of coffee.
The limitation is freshness
Coffee is ground weeks or months before you steep it. Nitrogen flushing and sealed sachets slow the loss considerably; they do not stop it.
That is the whole difference between a bag and a brewer.
Getting the best from one
Water just off the boil, not boiling.
Steep three to five minutes, agitating once or twice — squeezing the bag at the end forces fines through and adds bitterness.
One bag per 200 ml. Two bags in a mug is better than one bag steeped twice as long.
Where they earn their place
Hotel rooms, offices, camping, and travel where a grinder is not practical. They occupy the niche that instant coffee used to own, and they do it far better.
The alternative
A drip bag — a small paper cone that hooks onto a mug — is a pour-over rather than a steep, and generally produces a cleaner cup. Same freshness limitation.