It seems to me that I have to replace the battery every 3 years (I've had my bike for 10 years). The latest one when I took out, it's all dry, acid is gone, and the case is a bit ballooned up!!! What's the problem there? Is it because the battery is located too close to the engine so when the case is popped out so the water (mixed with acid) evaporates completely? Also, I do not ride my bike in winter (Chicago) and I don't disconnect the leads from the battery, is it bad not doing that?

Disconnect the positive side would be easier!!!  

I already ordered a new EBC battery online for $38.50 (shipping included)

Anyway, I did a little research here and found out that the old battery would work if I filled up the battery with distilled water. I'm going to do that tomorrow and see. I do have a charger though

ALWAYS disconnect the Negative lead first. It is safer.You can create a spark by shorting the tool to the frame. Potential Big Bang, & NO, it wont create a new universe, it just makes a mess & could sling stuff on YOU.
I've seen automotive battery switches, to disconnect the battery with the flip of a switch. Considering the current requirements of the starter, I'd say this would be easy enough to do, BUT, since ther's no clock, thers no drain on the battery, even if its hooked up. I would have a battery tender if I lived that far North, But, if I didnt have a Big Crank style battery, I would have to be able to check & maintain electrolyte levels, in a Low Hassle manner.

If I lived up North, Id have to have a Big Crank.

I have noticed the same situation with both of my Savage engines.
I am speaking of low liquid levels. Both of my engines charge at voltages in the high fourteens. This is enough to boil away some of the water. If not remedied by occasionally adding water, the battery will run dry and fail.
Swelled battery can be caused by two things. either it was in very cold weather in a discharged condition, the water will freeze and expand, usually breaking the case. Then when it warms, this water drains out onto bike parts causing corrosion.
The other possibility is heat due to over charge can cause the plates to warp and short out, also swelling the battery.
In both cases, replacement is the proper cure.
In the second case, maybe also check to see if the voltage regulator is working correctly.

Phelonius