which is because they don't have externalities priced in

It’s more that plastics are a byproduct of oil production.

As oil consumption falls, plastics will rise in price as there is less raw materials produced by oil refining.

Much like if demand for beef and milk fell, leather could be more expensive.

No, the problem is missing infrastructure for waste processing.

What do you propose, how should it be resolved? What would your proposal's potential consequences be (both cons and pros)?

I guess the suggestion you're trying to tease out is that disposable plastics are prohibitively taxed and people adjust to living with reusable containers. Cons: people have to adjust and the plastic lobby might suffer.

"Really cheap" in the short term perhaps. Very expensive in the long term.

What price do you put in the extinction of a species? Millions of years of evolution flushed down the toilet so one person can have their disposable water bottle.

The problem is externalized cost: the people making the decision to use the plastics aren't the ones holding the bill for its disposal.