There's a twofold problem with leather on a bike. If it is really fine, like the ladies' Italian leather handbag I use for a saddlebag, it is thin and splits after a few years in the sun; I paid only about thirty or forty euro for that one on Ebay, delivered, so it will be no great loss if it wears out in seven or eight years, but if I bought it at retail for 500, which is what the sticker said, forgeddaboutit. If the leather is thicker, it weighs too much. like the fancy washbag I use as a handlebar bag. So leather bike luggage has to be a happy mean, thick enough leather to last a reasonable time, but not so thick as to weigh a ton. That essentially means that full-leather luggage on a bike can't be too big, certainly not huge touring panniers. (And that's before they soak up their own weight of water -- and then some -- in a good persistent rain...) It's for that reason, rather than cost, because most of the cost is not in the materials but the labour, that Brooks' bigger bike bags are canvas, with just leather trim.
I used to use a canvas doctor's bag from La Madrilene in Paris that a girl gave me when I was a student (it had belonged to her grandfather, a noted psychiatrist) as a rack top bag, but it was a venerable antique with nostalgic and professional provenance in one of my professions, and fragile, and being damaged, so I stopped, But that would be the ideal bag, even having straps positioned just right to strap it to a rack.
I have proper branded cyclist's luggage in racktop and handlebar bags from Agu, and I like them for their functionality (they're superbly designed and made, and definitely waterproof) on less expensive bikes, but on my Kranich they just look cheap, like I fitted them without due consideration for the rest of the bike. As Dan says though, they were horribly expensive because all branded cycling gear is.
What I find is that, regardless of how attractive any of your luggage is for a particular purpose, none of it is all-purpose. I particularly hated the absolutely best bags for touring from a widely respected German maker because their roll tops, clearly the best thing for a tourer out in all weathers, for casual shopping panniers were just a nuisance. I kept them for a few weeks only because I loved the signal yellow they came in so much. By the same token I love the big, clumsy, ugly, totally inelegant Basil Cardiff pannier basket, because it works so well on an all-purpose utility bike. (For me, anyway. It's open-topped, but I live in a low-crime area, so nothing has ever disappeared from my basket when I have left the bike unattended with stuff in the basket.) Mine is tacky from use because until recently it was almost permanently on the bike; it only came off because I made a determined effort to slim the bike down both in width and in weight. You just chuck in a jacket, or a paint kit, or your brownbagged sammi, and off you go. But it does make you look a bit like a hausfrau out on her shopping, which might put off the more image-conscious cyclists.
Andre Jute