The problem isn't that recycling *isn't* profitable, it's not profitable for Waste Management which is the largest waste disposal company in the US. They view the landfills that they operate as mining interests and like all mine-able resources there's value fluctuation. Too bad, we must recycle and local/state governments need to push back when people don't want to separate glass from paper, it's about the environment not a company's ability to make more money off of refuse. Shit, in my community Waste Management came in and gave us all big bins where we had separation before, they created the stream problem in the first place!
I also find it problematic that China doesn't want our trash yet that would seem that if there's a consumable that could be manufactured from recycled materials, why isn't it being done in the US? The logistics stream to get a ton of recycled paper to China must be huge and expensive, why can't that be done in Detroit or some other urban area putting unemployed people back to work. The recycling issue is a microcosm for the larger economic picture, recycle the waste here, produce the materials that are value added here and then export them if there's demand. If there's no demand then why are we using the source materials in the first place? An example: plastic bottles vs. glass bottles.