I live in Utah now but grew up mostly in Colorado (pre-teen) and California (teen years) and never heard of a 'barrow' or 'borrow' pit until I moved to Utah. But the explanation I heard matches Whippoorwill's so I suppose the spelling should match his too...Isn't "barrow" a form of ancient tomb?

By the way, in my tiny Colorado town in the 60's many of the men still rolled their own tobacco cigarettes. In California in the 70's the only people who rolled their own weren't filling them with tobacco.