I was reading the Mt Massive page on our website and it mentioned that blue bags for human waste must be used.

IN ALL HONESTY, how many of you follow this?

Second, where can you buy a couple cheaply? And do they need to contain the gel/powder inside?

....this guy

http://www.summitpost.org/mount-massive/150369
Under red tape and regulations.

The page is incorrect. According to the FS, here is the regulation:

Bury human waste in a hole 6-8 inches deep a minimum of 100 feet away from any water source, trail, or campsite.

http://www.fs.usda.gov/detail/psicc/spe ... prd3795315