Gear was returned (I told him where I dropped it). At that time, most villagers destroyed everything that was marked as magical. Players today have far too much of a sense of entitlement to their equipment after they die. You die, it's gone, deal with it and don't whine about it. Consider yourself fortunate if even one item is returned, because none of it is owed to you. I repeat, don't bitch if it isn't returned. Kill them and do it back. People really need to lose this expectation that other people should be "fair" and leave them anything.
Along the lines of what Sam mentioned elsewhere on this thread: full looting used to be so frequent that if you died in one of the major cities, it was guaranteed that if your opponent didn't take something, lowbies took it all. There was no corpse guarding, and far less efficient Arbiter's keeping people from looting. For a while, I never bothered returning to my corpse if I died (and here, someone will happily point out that I shouldn't need to because people would full loot in response to me doing it to them/sac'ing magic items, etc). Just the way things were then.