It's an interesting question, and very difficult to answer. Like climate studies, you'd need to calculate so many side effects, that your answer might be different depending on the context you take into account. I've discussed this topic quite extensively with colleagues in urban planning and environmental sciences in countries across the world, but nobody knows (obviously) and people's preferences tend to align with what they have or have worked on. Personally I tend towards the automated / technology solutions (i.e., centralized), but I can't tell if that's because of a cognitive bias or from an increased ability in estimating these sort of things from experience, so that basically nullifies my opinion, too.
It's water under the bridge anyway.
No it doesn't. I live in so-called 'progressive' Holland where separate waste collection has been done for years. It's not efficient now any more (in 2013 we have better waste separation methods as was had in the 1990's) but people have become conditioned to 'separating waste = green' that it's hard to reverse now. Plus, the whole infrastructure exists now anyway, so the switching costs would take another decade to make back - an investment for which there is simply no room in these times.