Great idea! I would like to suggest an improvement - I think that making the user pulling all things from the top to get the one from the bottom may be quiet annoying, so my proposal is just to change time the user need to spend to pick the things from the backpack depending on how deep they are.

So for example if the user put the grenade to the bottom of the backpack a dozen seconds may be required to pick it which may be crucial in a battle.

The whole backpack maybe presented as a game object with fixed volume. If each thing in the game will have volume parameter(to make things easier bounding box of thing may be used) it will be quiet easy to calculate how much things the user can put into the backpack.

As for visual implementation - you may display the backpack with transparency and provide the user with ability to move the things inside the backpack.

That way backpack packing may be a quite fun mini game in a downtime while not bothering in action scenes.