I'm known for doing that. A common phrase amongst my players is: "HEY!! Stop using our loot!!!!" Healing/Magical potions, scrolls, wands...if they have them as "loot" then my NPC's will use them if needed.
You know what? I'm happy with NPCs using their items. It's the DM gloating afterwards that we didn't get some choice wand or whatever that I get annoyed by... Snorts, you reading this?
:-)
I wasn't gloating; I was apologising for the meagre haul.
And explaining that the reason the fight had been so gruelling was because they'd blown every consumable item they had.
Don't worry - notice the smiley there?
But I still haven't got an up to date treasure list! What's going on?