It's being packaged that way by a company that asserts it's better than the bottled stuff:
The startup, which calls itself Boxed Water Is Better, distributes water in milk cartons under the premise that paper packaging is gentler on the earth than standard-issue PET plastic bottles. Seventy-six percent of each carton comes from green-certified trees; it's then shipped flat to the water supplier, cutting back on transportation waste. The cartons can be recycled. And 20 percent of the profits go toward tree and water relief organizations -- though, it should be noted, that that hasn't happened yet because, as the company says, "we're still paying for our start-up costs."
But there are caveats:
...cartons are unlikely to replace bottles in terms of practicality. Imagine jogging with a milk carton or trying to put it in your purse after you've already opened it. You might as well stick a hose in there. The best that boxed water could hope for is to replace tap water -- and tap water is kinder to the environment than any packaging out there, whether plastic, glass, or paper.