It really all depends on the shelves or the space you are using for the fabric. If you are limited of shelves then with laying down you can stack a lot more fabric than standing but then you just take more time pulling out fabric when choosing and making a bigger mess. I bought shelves from a closing borders book store and have a lot of shelves but. Still use both methods for storing my fabric depending if I have them in bolts or folded or on boards.
Good luck and happy quilting