This is genuinely useful. I have so many loyalty cards that exist only as physical barcodes that stores refuse to look up by phone number.
The privacy concern about sending pass data to the server is valid though. Since .pkpass files need to be cryptographically signed with Apple's certificate, there's no way to generate them purely client-side.
Potential solution: open source the signing code and let users run it locally with their own Apple Developer account ($99/year). Power users would do this, casual users can use your hosted version.
Also works with Google Wallet apparently, which is great for Android users.
For loyaltycards there was Stocard, but it got acquired by the toxic company Klarna.
SuperCards is very very similar, and in my opinion more useful than putting everything in Apple Wallet. You get to store a pictures, and everything is in one place. Apple Wallet is already cluttered with tons of creditcards, tickets, etc