Can you sell bags in the bazaar or do you have to tokenize them first? That's the only reason I can think of.
Do the tokens stack? If so, then that's why. If they don't stack, then yeah, these are no longer needed.
Bag tokens do not stack. Now that empty bags can be placed in other bags and bag tokens can self-convert back into bags, we felt it would be cleaner to remove the Bag-to-Token converter NPC from the game.