They're Useful!
1) Breadcrumbs! Drop cups of water when you need to remember where you've been for 15m or so. Great for Ghost Hunting, looking for DNAja-vu, going on a shrine donation run, etc.
2) Newbie traps! Looking for a lvl 3-5? Drop some cups down and sit & wait. They'll come and check it out "ooo what's this useful thing on the ground... that I cannot pick up ACK!" Pop out and surprise them with a bag filled with butterfly lotion, a music block, and good low-level food & drink.
3) Stop Greedy Food Hunters! Getting annoyed by one person taking all the party treats before anyone has a chance to nibble? Fill their bags with cups of water! Cheaper & easier than shiny objects. Of course, they can just drop the water and litter the party, but hey! you made your point. you caught them and they know it. That's gotta count for something, right?
4) They lower your mood! For free! Need to drink a Flaming Humbaba to grind some ore but a bit too happy to do it? Take a swig from a paper cup.
They're Fun!
5) Photo Ops! Drop cups of water, booze, and food for instant party pics!
6) Party Balloons! Lacking balloons, mark the site of your party by dropping a bunch of cups. Folks that get a bit lost will know they've hit the right place when they see a dozen paper cups at the sign or in front of the house.
7) Litter! Drop cups at popular camping spots (keys, doors, tool vendors). Drop them in and around subway stations and make a big stink about how the street or region has gone downhill and what are your tax dollars paying for anyway?!
8) Mining Makes You Thirsty! Scatter cups around popular mining areas like Ajaya Bliss & Neva Neva. Note: this may result in some unpleasant splankings if you get too close to the rocks & the miners are not up for pranks. Use at your own risk. Don't be a jerk. Seriously. Just don't.
9) Bag Stuffing! Have a friend that spends a bit too much time AFK? Tsk Tsk... they should not be playing from work! Stuff their bags with paper cups and other fun things while they're snoozing. Note: this is best with friends who like that sort of joke. Again... Use at your own risk. Don't be a jerk.
They're Free!
10) Um, they're free! All you need to get one is to pop into any of the Bureaucratic Halls and head to the watercooler. Take a cup! Or 16 cups. Or 256 cups... thats a lot of cups. But who cares! They're free!