This is how I prefer to handle PRs, too. `git merge --squash pr-branch`. Prevents the history from turning into an indecipherable tangle of branches, and prevents tons of "fixing typo," "code review feedback," "more code review feedback," "adding back file" kinds of commits from taking over the history.
We are on GH, it's quite annoying that they provide 0 support for rebase/squash style PR application. http://stackoverflow.com/q/27974175/1366219