As you get deeper into Path Of Exile and have more IIR & IIQ (IIR & IIQ - What Does It Mean?) you'll inevitably get into fights with hoards of monsters that drop a lot of junk you don't care about. As this is going on it can be convenient to temporarily disable items on the ground.
If you're fighting in "Free for all" or Short Allocation, I might opt to deal with it since you want to be vigilant on any good drops. In most games though, gamers are using Permanent Allocation (PA). When this is the case, use Z to toggle items on/off temporarily.