When someone dies and loses part of/all of a suit, I have always said, and stand by the rule of returning said parts/suit. It's stupid to keep someones suit and stop one more person PvP'ing in an already dwindling pool of PvP'ers. As long as we were in RoT, I made sure that happened, the one time we held onto something was when SWAT looted Anti's arms, and I used that SWAT kids suit to make a trade off with Courage (Who was intent on keeping Anti's sleeves.). In fact I solo raided about 6 OATH on the island a month or so back. I looted Ty the big sexy's entire suit afterwards, then returned it.
Now on the other hand, if someone was to drop something in a PvP area that is not suit related that they didn't want to lose. I say it's on that person that looted to make up their mind. If I was so careless to bring a 120 eval and 120 resist to Yew gate when I'm hopped up on Vicodin after a surgery, and get myself guard whacked (True story =<) and looted, am I going to beg the guy to return the scrolls? If I was to burn a lot of val hammers at 3am and drunk, put them on a beetle then pass out, then have a guy kill the beetle and loot my stuff, am I going to find him and ask for the stuff back? No, I'm going to laugh at my stupidity and move on. Such trivial items such as stat scrolls, deco (Though being old guildmates should have come into play in the returning part), or other items of miniscule importance should not even be posted about. If you bring something out you don't want to lose, die, then get looted. It's your own fault. Even if it does happen during a x-fer (Why didn't he x-fer in someone's house?).
Now if he lost suit parts (Not faction items, they don't count as real items) then I feel they should be returned. The other items, well chalk it up as a lesson learned and move on. That's my two cents on the matter.