I don't hate the idea.

But if you think it through, it's intractable. You need to 2x+ the transportation cost of all products (it will cost more to get them back for multiple reasons, including products not being as neatly packaged and often going from many-to-one transportation to many-to-many). Companies also need to double their specializations and adopt recycling processes that will largely be redundant with other companies; you basically make it impossible for small companies to make complicated products. And are we including food products, the majority of trash? It makes a lot more sense to centralize waste repurposing and benefit from economies of scale.

Waste management is already a very profitable industry. Of course, it's wasteful, just burying stuff, and environmentally harmful. But I'm of the opinion that it will soon be economically viable to start mining landfills for different types of enriched materials, and government subsidies could bridge the gap for things that are of greater public interest to recycle.

I've been working on the software side of the technology needed to do this in my spare time for a couple years, waiting for some hardware advancements.