what was the loophole?
It was twofold:
1) The fast pass rules were that you could get your next one 2 hours later, or at the start of the return window of your most recent one, whichever was earlier. If you spent the early part of your day snapping up fast passes with early return times, you could accumulate several to use the rest of the day, because...
2) Despite the time window listed on the ticket, you could actually use the fast passes at any time after the start of the return window, even if they had "expired".
As an unrelated loophole, some fast pass machines were "disconnected" from the network and would issue you a pass regardless of whether you were time-eligible or not.
So, with a good plan, you could build up a nice collection of fast passes, while riding things on standby in the first couple of hours when lines were light, and then spend the rest of the day cashing in your passes at your leisure while the rest of the crowd was standing in lines.