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I know they're poor, but I'd expect more. And I'd expect some money!
Do I even get loot for beating the people who attack them?
No.
As for the rewards, unless you truly are a pauper, refuse the reward and go for the extra relation boost. You can never have too many villages who like/love you (and are willing to join your army).
Only freemen are vollunteering right now and with no camp to put them in, it's becoming hard to pay them.
Noone has jobs for me!! They're just asking me to deliver letters to places I don't recognize.
Well I've found some lairs, and destroyed them. No big deal, and i got some loot. But doesnt seem like a reliable long term source of income. Do they respawn?
A better way is to NOT raid the lair and simply farm the bandits.
Failing that, in the short term hunting bandits earns decent money. In the long term, having a high trade skill will be very useful.