This would be a not-insignificant architecture change...
...but if you kill a goblin, its clothes should TOTALLY stay on that corpse. Held items no, worn items yes.
Yeah this would really screw with adventurer mode, and it would mean that when you cut someone's leg off, their boot is still on that detached leg...
...but the big advantage comes with a new refuse option: "Scavenge items from dead allies / dead enemies". Two different options. Each one can be set to "Nothing", "Scavenge metal items only", "Scavenge all non-clothes", "Scavenge everything". So you can choose to take all valuables from goblins and then chuck 'em in the pile with their clothes on, but bury your dwarves along with all their possessions (including their armor). Or you can choose to only take strategic metals from goblins, for re-smelting, and also reclaim the armor from your own guys (so others can use them).
Possibly, you could also just disable all scavenging when there is a siege on, and then re-enable it when it's all clear...
Yeah, some of these problems could be better served with other fixes. Specifically, multiple-item-hauling and civilians-stay-inside-really-I'm-not-joking. But I honestly think that having to purposely remove items from a dead guy adds to the game. I mean, it's just weird to take a goblin's clothes before you toss him on the body pile. And when an adventurer gets to the site of a battle, there shouldn't be plate armor JUST LYING THERE: The adventurer should have to take it *off* some guy. Make it into a very minor legend, or even just remember it yourself: You're wearing the armor you removed from a dead soldier. That's slightly hardcore.