Recycling really boomed, 10 to 15 years ago, as cities and other jurisdictions were encouraged by federal policies, as well as by the realization that recycled materials could be sold. Places that up to then hadn't bothered to recycle much began to get serious about it, while those that already had programs started to expand them, taking in more and different materials.
One of the key factors enabling the upsurge was a move in many places from "dual stream recycling," in which households and businesses were required to separate paper from bottles and cans, to "single stream," where everything could be recycled via one container. The local sanitation authorities, if effect, took on the job of sorting, relieving the individual citizen from that "chore." Separating may not seem all that onerous, but the effect was to increase significantly the volume of stuff that was getting recycled, and the number of households and businesses that were participating. [In my area our smallish yellow recycling bins, about the size of a couple of grocery bags, gave way to a blue rolling cart that's just as big as our trash bin.]
At roughly the same time, over some years, the types of materials that could be recycled also expanded, to the point that in many areas, people were told that if they weren't sure what was trash and what was recyclable, to err in favor of the latter. Again, the effect was to get a much higher volume of materials recycled. [In my own area, for example, even books can now be recycled, not just paper and corrugated cardboard; and where once we had to consider the difference between milk jugs and yogurt cups, now most kinds of plastic are fair game for the blue bin.]
Now, however, many localities are finding their success in squeezing more recyclables from users has a few downsides:
Too many people are tossing items that can't be recycled, requiring expenditures to separate and dispose of those; the increased volume of some materials creates an oversupply that lowers the price end-users will pay; and even a lot of the recyclable items, when mixed together even with other recyclable materials, become unusable for manufacturers and can't be sold (e.g. glass particles in recycled paper).
Thus, from being a source of income, many recycling programs have turned into a drain on county/city budgets in short order. [Again looking at my local situation: In 2011 my small 24-square-mile county generated more than $600,000 by selling recycled materials; last year, that figure was down to just $11,000 - and we are one of the few jurisdictions in our area still netting a slight profit; many are in the hole.]
Big change! Officials are looking for solutions, but there appears to be no ideal one. One interesting point the Pope made last month in his encyclical on the topic of pollution was that, while nature has a pretty effective universal recycling system that works automatically and on a global scale for organic materials, man has not yet created anything nearly so effective for the stuff he creates.