I'm fairly certain there are rules of engagement allowing for retrieval of your own dead that might balk if you tried to gather *everyone's* dead...
And more importantly, if the British made a habit of collecting Japanese corpses, the Japaneses may start wondering *why* they're doing so. I agree it would have been better if this were brought up by the story - maybe not explicitly, but at least addressed on some level - but this fits in with the theme of oracle being more important to the war effort than any of the soldiers. Giving the enemy any reason to suspect something is up would be unacceptable to a level that allowing allied soldiers to die is not.
I thought this was an excellent story. I agree, in retrospect, with a lot of the criticisms - the story did shift gears quite abruptly mid-way - but that didn't bother me while I was listening. I felt this was an excellent examination of the horror of war and its effect on people. There may not have been man-eating volcano-inhabiting psychic blobs in the real world war 2 (as far as we know), but decisions of a similar nature have been made many times over in the real world. This story, by using a supernatural agent, really brought home the fact that war creates situations where there is no acceptable moral alternative.