Pak files have some major speed benefits:
1) It's size won't change so if during the installation it was copied unfragmented on your HDD, it will always stay unfragmented (unless you modify it) and each time you load something from HDD, it will be read from the same place. That's a major speed up when reading something from HDD.
2) If you read something from a pak file, lots of mechanisms in your OS caches some area after the area you just read, so it's probable that the next file from pak you are going to read is already cached. When reading only one file your OS usually doesn't know that it should pre-cache some other file from the same directory.
3) Not only OS but also your HDD can pre-cache some data because it reads from blocks and how mentioned in point 1 - usually your pak files are in subsequent blocks each.
4) It can be easier for your OS to open/close only one file compared to open/closing many files. (Rather guessing here.)
So if you like fine-tuning and you would like to speed up loading time, move all your data to one .pak file and make sure it's not fragmented - e.g. move it to another partition and then back.
I'm sure that the speed up can be noticable, no matter how fast/slow your HDD is.
There's also a space factor:
If your allocation unit size is e.g. 16 kB (it's usually smaller), in average each file on your HDD takes extra 8 kB of your space. If the game contains like 400 files, that's more then 3 MB of extra HDD space. Having all the stuff in one file will save you 3 MB of your HDD space. I know .. *yawn*. But in 1996 that was a real argument I think