I live in jeans 365 (pretty much!) and always have a pair or two to cut up.
Denim is such a great material to recycle and is strong and durable enough for handbags. I made a few of these crazy patchwork ones last year for a bag sale, and loved how they turned out (they sold really well too!).
I've also used different coloured denim for a weekend bag which I'm currently teaching in class. I even used the tie belt from one pair of jeans to make the handles!
I've even used denim in cushion making, although I don't recommend mixing denim with lighter weight fabric scraps. Keep everything to the same weight and you'll be fine!
Other uses for denim I've found are doorstops - again strong and strudy for such a heavy object.
I'm afraid charity shops don't ever get my discarded jeans now!