The downside is with a realistic encumbrance system, you'd either:

A) Not be picking anything up, or:

B) Making so many milk runs your head will spin from the tedium of ferrying useless bullshit back and forth.

Being 70-80 hours into STARFIELD, there's non-cheating ways to avoid the encumbrance penalty, such as the "Powered Assist" backpacks which lowers O2 / stamina consumption by 75% when overencumbered. You can also deposit your loot into your ship's cargo bay and sell directly from it by pressing Q at any vendor.

In ITR/Into The Radius VR, a fully realistic military looter shooter survival horror like STALKER; I picked up and carried EVERYTHING, but through the use of an inane amount of utility items, such as a chest harness, backpack, lower back bags, leg bags, thigh bags, and so on. (My favorite thing to put in my belt bags was cake slices and energy drink cans, made for hilarious streaming content when you take a bite of cake in a dire situation)

I still spent like 20 real-life hours slogging knee deep through swamp to ferry back an entire inventory of artifacts worth 5K/ea.

So my takeaway is, people are gonna loot and hoard; if they do that, encourage it. If not, reward the player with more credits from missions and other things that don't involve scraping and strip-mining every planet for every ounce of metal.