Back in the "good ole days" when everyone was a munchkin, we didn't have to use bags because somebody in the party would have a portable hole. For some reason, portable holes become much less common once emphasis shifts to storytelling and character play, so I've been in situations in which it was necessary to dump treasure in order to carry the corpse in the bag. I'm proud to say that I've never run in a group that had a problem with that, which is not to say no tears were ever shed about the loss of cash.
The weirdest bag of holding use, however, didn't involve dead people. In a 2nd edition game set in Waterdeep, the party included nobles who were also doing a lot of "mundane" business to finance their lifestyles and maintain their family reps. Garnet Stormweather had business in the Arabian analog worth Teleporting to do and her friend Denys Hawkwinter wanted to sell some horses there, so we Polymorphed the horses into canaries, put them into a cage, and carried them there in the bag of holding. I think the party itself couldn't quite fit the weight limit, so we put the halfing into the bag, too.