Personally, I use a laundry bag ... same idea as yours except the bag is canvas and has a shoulder strap. I usually line it with plastic too, just in case.

I think the laundry bag idea is GREAT because:

1) It is durable - it's not too likely to get ripped open.
2) At the beginning of the tour, I'll have my two neatly packed panniers, but by the end, I usually have two badly packed panniers and a bunch of extra stuff that I seem to have accumulated along the way that doesn't fit in the panniers anymore. I can just stuff that stuff into the bag along with the panniers.
3) It can be folded down to quite a small shape and tucked into a pannier, and it is light.
4) It can be used underneath your pillow to add some extra bulk and comfort.
5) It can be used under your mattress as a sort of ground sheet to block the cold a bit and add some extra comfort.
6) When you're doing Randonneuring events like I do, you can stuff all the things you don't want to take with you on the Randonnee into the laundry bag (like camping gear, and extra clothing, etc.), put it into storage, and send your panniers with the stuff you do want to take on ahead to the bag drops.
7) You can even use it as a laundry bag when you've got to take a lot of stuff to the laundromat.


And about that shoulder strap ... I used a regular laundry bag without a shoulder strap for a few trips, but it was hard to carry around through airports etc. Then I got the one with the shoulder strap, and it is perfect!! I can sling the whole thing onto my back, and my hands are free to carry my bicycle it his cardboard box.

Incidentally, one of these large laundry bags with a shoulder strap costs about $12 and lasts ages. It can also get your stuff onto airplanes (especially Air Canada) without the additional $175 charge for having more than 2 pieces of luggage.