Yeah, you're supposed to put it in the case. Surely there's room somewhere! If it won't fit, perhaps you ought to get a new case?
A guy in a local music store told me a trick for keeping a guitar humidifed. He said, 'Put an apple core in there and your guitar will stay humidified and smell of apples!' Yeah, and I bet the case would start growing stuff inside it, too. :lol: