Bagworms aren't a "great bait" but they're a good bait for panfish, bass, and catfish.
A good fisherperson never limits their options. Almost any edible fish can consume a small "case". Larger fish can take a hook loaded with several. Catalpa worms are famous with bass and catfishers and it's a regional/seasonal thing. We've had good luck with channel catfish on bagworms from Junipers, case and all, single or several to a hook in ponds and small impoundments.
Cutting the case is not easy without a good, sharp pair of pruners/snips but we've done it for years to catch baitfish for flathead cats. Bass seem to ignore the cased worms. Felco!
I rarely eat catches due to water quality and health concerns. I rarely spend money for bait when Mother Nature provides so readily.
Edit: I do appreciate the well-written, informative write up and I myself am very well aware of bagworm infestations and the potential for complete devastation. I've grown many a mighty juniper just for fun and bagworms can destroy years of joy in a season. I've never had to deal with them in uprights which would truly be a nightmare. Simply adding an alternative use for those that can be plucked.