As I see it, it's not necessarily the amount of stuff you can carry around, but the fact that you get completely lost with the sheer amount of items. I'd be happy with a more organised inventory, e.g. an own tab for documents/books as well as separate tabs for crafting materials and alchemy ingredients.
Thinking of it, I'd even be content with the game *not* rearranging my stuff every single time I pick something up, just put it at the end.
But - saddle bags *are* a nice idea, so why not develop this idea further instead of just letting the bags increase your capacity, i.e. treating *them* as an "external" storage? Imho it would make perfect sense, since (while it was strange to have your stuff follow you around from one inn to the next) Roach is with you most of the time anyway. As for accessing the bags - this could be done via a switch button in the inventory screen ("Show Inventory" <-> "Show Saddle Bags").