So wouldn't making the recyclers more efficient reduce their costs as well?
And how do you propose to do that? Recycling means you get a mixed bag of everything people gave you and you never know what they were thinking. As an analogy, around here at Christmas time there's a donation box for gifts for the poor and because of the personal touch it encourages more and bigger contributions than paying donations. They wrap it up nice and pretty like it's ready to go from secret Santa to straight under the Christmas tree, on the card you're supposed to write the target age/sex.
Do you know what happens to all those presents? They're unwrapped, unpacked, inspected, reviewed for age/sex appropriateness, repacked and re-wrapped. And not just because some people have a bit strange ideas about what's really fit for a Christmas present or useful for a kid. But because there's always some ass hat with mental problems who'll wrap up a broken PlayStation or sex toy or dog poop and a note that says here's a little shit for a little shit. The system only works because they got volunteers willing to perpetuate a fantasy while shielding the recipients from what would actually happen.
You just can't get away from that individual checking of everything. It's the same thing that's killed much of the repair business, if your toaster is broken go buy a new one. Even if it's just a tiny fix the repair guy has exhausted the budget almost before he can get the lid off while a thousand rolled off the assembly line in China. And if the market doesn't care the manufacturer doesn't care about making manuals, parts and equipment etc. available either. Huge, controlled environments with identical items have economics of scale. Small, uncontrolled environments with mixed items don't.