Don't know about 3.2.3, but in JBoss-4.2.2(the latest available version) there's a flag in jboss-service.xml (under %JBOSS_HOME%/server/xxx/deploy/jboss-web.deployer/META-INF) which can be set to true, to delete the contents of the work folder on context destroy:
<!--Flag to delete the Work Dir on Context Destroy --> <attribute name="DeleteWorkDirOnContextDestroy">true</attribute>
Any specific reason why you are using the older version of JBoss?
Just looked at one of the local 3.2.3 JBoss setup. It ships with Tomcat-4.1. The reason why the work folder does not get deleted *might* have to do with a bug in Tomcat (http://issues.apache.org/bugzilla/show_bug.cgi?id=35819) which got fixed in Tomcat 5.5.10. The bug has been reported for Tomcat-5, so not sure whether this behaviour was present even in earlier versions of Tomcat.