What is an "itabag"?
The term itabag (痛バッグ)—and yes, it is one word when translated, not "ita bag"—roughly translates to "painful bag", which gets the name from being both painfully expensive, as well as painful to look at or carry around (in the more "cringy uber-fan" kind of way, not physically painful). Itabags are handbags, totes, or backpacks decorated excessively with character merchandise, usually from anime, manga or video games. The most common things used to decorate itabags are buttons, rubber straps, and small plush toys.
Kotaku did a pretty good write-up on the subject here.
Why are a lot of the bags I see covered with another bag that’s clear?
Due to an itabag’s expensive nature, makers will invest in a clear plastic covering to protect their merchandise. There are even bags being made now that specifically cater to itabag makers by including a clear outside bag, or having a cutout window design on the front to showcase the merch inside. If your base bag didn’t come with these features, it’s easy to make your own if you have some basic sewing knowledge.
Do I need to use a clear bag?
No, but if you’re paranoid about losing anything off your bag or damaging your stuff, it’s probably worth it to get one. “Better safe than sorry.”