I'm certainly not against plastic bags. Or paper, or reusable. I'm against the over-regulation involved. In this or any other similar topic.
That said, I'm 100% against littering. And plastic bags that are tossed on the ground, or escape out of garbage cans, dumpsters, garbage trucks, etc. are ugly and long-lasting. Along with other large pieces of plastic from various construction, shipping, farming, and other industries. I'd like to see a vegetable-based plastics industry start flourishing. Apparently it's known as "bioplastic." Like the product dogmush mentioned.
I don't think the technical challenges are difficult to overcome. And as I understand it, recycling is more efficient than petroleum-based plastics. Those items that are not biodegradable are more easily and efficiently reused.