In some ways I think this situation has been exacerbated by proponents of plastic who have marketed it as "infinitely recyclable" for many years. That statement is technically true, in that there exists a process by which you can take post consumer plastic and reduce it back to its component parts for re-use. At the same time it ignores the reality that 'original' plastic, as the end product of a chemical process, is quite pure.
Thus when you build a system that uses plastic to create products, if you build it to assume the purity levels of pre-consumer plastic, then the onus is on the recycler to create the same level of purity. Estimates on the cost of doing that range from 10x to 100x the cost of creating plastic out of raw pre-cursor chemicals. The reality is that there isn't a market for $20 coffee cups over $2 coffee cups because they are "100% post consumer".
I think getting the discussion on to a more realistic footing is a good one. It is much easier to make policy when you have a shot at working with markets rather than against them.
To that end, incinerating plastic to generate energy makes a lot of policy sense in a 'peaker' plant. It isn't "reused" in the sense of making more product but it does give additional benefit to the consumer.
I am also a proponent of structural re-use of post consumer plastics. It has good insulation value, especially when foamed, and building engineered walls with the post-consumer plastic providing a better than air insulation layer has a durable long term effect of reducing baseline energy load which goes to environmental control (heating/cooling) in buildings.
It violates the stories that people have been told that their shopping bags will be infinitely recycled into new shopping bags, but it feels to me as a much more authentic way to represent recycling.