Again, as I said in my first post. Is it fun? I can honestly say I have never, not once, seen a player, let along a group of them, happy to have their stuff taken away from them.
Like say you're a Wizard. Realistically, you can't go on an adventure near anything on fire because your spellbook and all the money you've spent adding to it would go up in smoke. What's your means of preventing this? Not going on the adventure? How is that fun?
Extradimensional space? Oops, the DM thinks that might get destroyed by fire too! Getting it made out of metal plates bound together by metal rings? Nope, you fall in lava, it melts.*
*Just going to warn anyone now, if you want to post about how this "balances" Wizards, I won't be responding. There are so many better ways to balance a class than say that your ability to even cast spells is subject to the DM's whims.
What's the upshot here? Oh and about those mountains of gold coins, where were they being kept, because if any are on your person, we all know how easily gold melts!
When your justification is "it's their fault for going on this adventure in the first place", I see a problem. What are they supposed to do? See the adventure you have prepared and go "nah, I think I'll go home and play some CoD instead"?
But hey, maybe your group thinks this sort of thing is funny, and their whole reason to adventure is to see how messed up they can get, and their ideal rewards are Bags of Beans or Decks of Many Things. It takes all kinds.
But if that's really the case, then you shouldn't need to ask online if it's ok to nuke their items after the fact- you should know what your players enjoy.
I remember back in 2e, I went on this three-adventure series set in Krynn (In Search of Dragons I believe was the first part). We started at level 1. Towards the end of the second module (or during the third), we're in this fortress, and there was something like a Mordenkainen's Disjunction trap. Lost most of our magic items, at a level where most things need a magic weapon to touch.
By end game, we basically had the same gear, but different (my Footman's Dragonlance was replaced by a Horsemen's Lance, my full plate +1 was now full plate +2), which really made me wonder exactly what the point of the whole exercise was. But I can tell you that none of the players were happy about it, because it was so random and unnecessary- "hey guys, you've done well to get this far, and reaped rewards for it...oh hey, let's just get rid of those to make way for new rewards because we wouldn't want you to have an extra +1 longsword or anything!".