Well, the real solution is to reuse bags instead of killing trees or creating plastic waste. And people have been saying that forever.

Hmm, the problem was not that paper bags inherently kill trees, it was that virgin forest was being destroyed and not replanted in order to make paper products. So the obvious solution of using sustainable forest growth and recycling was rejected (however, maybe by "The Market" - aka refusing to accept responsibility for externalities) presumably because plastics were marginally cheaper.

Market forces just don't work for these things because the negative consequences are decades away and don't necessarily affect the producers/consumers at all.

Your position that people who didn't want rainforest destroying for one-time use bags are responsible for one-time use plastics is way off the mark. Such people use reusable bags from sustainable sources invariably, for example.

When these issues hit the mainstream, and the public don't fully understand the position, then it's easy for the Capitalists to shift to the 'next-worst most profitable' thing rather than shifting to a sustainable production.