An individual who smells like hot garbage, bathes in his or her own urine & lives under a freeway overpass; A subject who is usually addicted to one or more drugs. A derogitory comment usually aimed @ transients, crackheads, or asshole buddies.
As the name suggests, a 'shit bag' is simply a bag filled with shit. Alternatively, Wikipedia states that a 'shit bag' is a colostomy bag, but each to their own.
"Shit bags are air and water tight and allow the wearer to lead an active, normal lifestyle that can include all forms of sports and recreation." - Wikipediaon the shit bag.