After enough 'breakdown', the peat/coco becomes structurally 'weak', and once it gets wet, can't maintain the air spaces under it's own weight. Basically, it's a fancy way to say 'heavy'. If you water str8 perlite, the medium level doesn't drop at all...
this is why its best to replicate real soil, or use real soil. over time the micro organism give off a glue like substance, this holds the soil particles together overcoming that problem and keeping it well draining and aerated, yet still able to hold water. its really hard for them to do that when your "soil" is basically peat and perlite.
thats not to say it cant be done, it just takes more work on your part.