Funerary customs differ widely in the real world. But in a roleplaying game, there are many reasons to burn the bodies of fallen enemies and allies alike.

Here are just a few of the reasons: Zombies. Ghouls. Vampires. Liches.

Transcript

Obi-Wan: The Jawas should be burned. It is their way.
R2-D2: My way too.
R2-D2: Oh, you mean the dead ones. Fine. Here, I've already looted these.
{Luke arrives back}
Luke: Owen and Beru are dead. The homestead was all shot up.
C-3PO: Oh no!
Luke: I thought they could defend against anything. Those troopers must be better than you thought.
Obi-Wan: Hmm, usually clone troopers are really lousy shots.
R2-D2: Yeah, right. They shoot droids just fine.
Obi-Wan: Droids are different.
R2-D2: Superior. More worthy targets, obviously.
Obi-Wan: I once fought Jango Fett, their clone-father. He had a nervous twitch fighting living targets. He never hit.
R2-D2: You living targets need all the help you can get.
R2-D2: Anyway, we're done looting. Let's go.
Luke: Hey! Where's my share?
R2-D2: You... actually, sure. Here, I grabbed this spread-spectrum black-body alpha wave suppressor. You can have it.
Luke: Uh...
R2-D2: It's a +1.
Luke: Cool!