Thanks to all who replied. I know now to be more careful the next time I knit a bag!
For now I have blocked the bag, and that helped a lot. When it came out of the washer I was careful not to tug on the top edge while pulling the bottom part out. I stuffed the bottom part as full as I could with plastic grocery bags and toward the top I sort of rolled the edge in. I think the edge will always look a little loose, but with the bottom rounded out at least things will stay in the bag!
And afterall, this is what I intended for it to look like!
(I liked that suggestion!)
Thanks again! Momofthree