Though I like the realism of DF, like the fact that all possessions of a individual are dropped upon his death, this causes the problem of dealing with all this loot, when in sieges, for example. You can sell all this loot and make a tremendous profit for the caravans, thus giving no reason for you to produce goods to trade, or this itens will be cluttering your stockpiles and maybe slowing the efficiency of your fortress or even dropping the fps.
I usually just forbid all the itens, and later I dump/melt them. However, for a single siege it takes a long time to get rid of all these itens.
My sugestion:
Historically, great battles atracted scavengers, who would sold the loot as scrap metal. Sieges, and maybe ambushes, should atracted some nuisance type creatures, like kobold thieves, just as caravans do. They would steal most of these itens in a period of time, therefore if the player want the itens he should deal with them to avoid the steraling.
These itens should be damaged too, but I think this is already planned to be introduced sometime in the future.