I really don't think this is okay. Some people might have no problem with seeing dead bodies, but most people in our culture do. I've seen a few in person myself, and they have never, ever looked like they were just sleeping. Not even my grandpa just moments after he'd passed away. It's polite to burp after a meal in Japan, but that doesn't mean it's a good thing to do at a dinner party in the US.
If your friend is from a culture where this is normal, that's one thing (is she?), but I'm assuming she's not. I am assuming, however, that she's deep in grief and probably doesn't have the best judgment at the moment; you said you were already thinking of removing her from her newsfeed, but if you weren't, I would say to let it slide. Not because it's okay but because people do weird things when they're grieving.