This idea works well with carryons, also. I have each child carry a backpack with books, toys, etc. for the plane ride. I also have each one carry 2 ziplock bags: one has a change of clothes, with undies and socks, the other has pajamas and a swimsuit and toothbrush (in it's own ziplock). That way, if some luggage is lost, we have the basics we need.
When my kiddies were little, I just packed all the ziplocks in one carryon, and didn't put it in the kids bag. But now that they are older, they carry less stuff.
Another story: on our first WDW trip, I packed in ziplocks. My oldest ds (then almost 9) chose his clothes by what shirt was in the bag. My youngest ds (just turned 4) chose by what undies were in it (Buzz Lightyear, batman and so on)
Julia