Why do we use so much plastic, and what could (should?) replace it?

There are already, viable replacements; depending on the item to be contained. Many of products are sold in them already. Polymer blends made from plan fibers that are engineered to start decomposing once the come into prolonged contact with soil. The common customer just doesn't know it. Companies don't use it as a marketing tool because many consumers would falsely believe that the packaging will decompose on the shelf. They have half-lives that are measured in months and are essentially "gone" 1-2 years after being put in a land fill. The disadvantage is that they typically won't take as much abuse as plastic containers.

The most difficult and thus expensive packaging problem are liquids and oily solids. Americans like their soft drinks in clear containers. There are decomposing translucent containers and their half lives are measured in years or decades, taking 50-100 years to "disappear" and they aren't cheap. Compressed wax paper containers or foil lined paper containers are viable, but test marketing has shown that Americans typically will stop using a product that switches to them, favoring plastic.

By the way polished paper finishes with a high gloss print labeling adds years onto the half life of paper packaging.

Recycle is an alternative but just maybe reducing the production of some of these products and use safer alternatives. But that costs money and getting Corporations to spend money protecting the environment seems difficult in today's market place.

The environment is negatively affected by human activities (building houses, pumping oil, throwing garbage into the street, waste from factories), not by plastic bags. I agree that polyethylene can also be detrimental to the environment if thrown outdoors rather than in the trash can. Polyethylene is one of the essential things in everyday life, as it is one of the most durable materials. For example, paper bags are often torn, and when you are walking down the street, these bags at any moment can tear, and all the food can fly in different directions. When I go to the store to buy small things, I take halloween bags with me, and I order several different ones every month. I use them until it rips and only throws them in the trash, not polluting the environment. So it's all up to the individual. https://www.interplas.com/halloween-bags