I wouldn't use it for a bag because it looks very delicate. I would probably put a very flat backing and make a wall hanging, or put it into a poster frame. On one of the blogs I read, Casey (blog owner) has a vintage handkerchief mounted on a white board with magnets (prevents having to pin into it). You can see it here:
http://blog.caseybrowndesigns.com/20...lections-four/
Not sure how big your piece is, or whether this would work, but I thought the idea was fabulous and plan to mount some of my own vintage hankies this way!