It’s a bit misleading to imply that the plastic bag is pulling the moisture out of the bread. Moisture will leave the bread regardless (unless the humidity in the surrounding air is as high as the bread), the plastic bag simply traps the moisture so you end up with more moisture in the crust causing it to become soft. My preferred method is to keep the bread in the paper bag, then put the paper bag inside a semi-open plastic bag. Slicing then freezing is also a good method, toast when needed, or make sandwiches with the frozen slices, they thaw in a couple of hours.

I suppose the cotton would allow the bread to breathe.

http://preview.tinyurl.com/5qyq39

Bread storage solutions which dry out bread are not to be feared if you are adept at re-hydrating. The simplest way I’ve found to do this is to wet a dish towel, place it over the bread you wish to re-hydrate, and microwave it for ten to twenty seconds.