I've seen it done, it's an old European immigrant practice. The idea is that you would take a photograph with loved ones around the deceased and send it back to the family members still in the old country. It was meant to comfort those who were not in the US so they would know that the deceased was around loved ones when they died.
Now if you want to get into creepy, think about the origin of the term Living Room. People were given a wake in the parlor room of their own house. The mortician would do his business, or the body was literally just kept on ice. When Funeral Parlors became more popular, people stopped using the term parlor for their homes. The parlor was more notably now a room for the living, and no longer the dead, thus the name Living Room.