Trash and recycling are interesting topics to really dive into, because a lot of what we think we know with certainty may be a case of "it depends". For example, recent evidence is showing that recycling is not always good for the environment. The blog post before this one has more readings on this topic.
Here is another article from the Washington Post on contamination from single-stream bins.
The main takeaway seems to be that some recycling is definitely very favorable both environmentally and economically (e.g. recycling aluminum cans prevents destructive mining of virgin bauxite and helps us avoid the polluting generated in processing the ore) while the benefits of recycling other materials may depend the material and your location . Glass recycling in particular looks much less appealing on both environmental and economic grounds than other products.
On the consumer demand side, the fact that we can now recycle products with very little effort may cause us to think less about reducing waste at the source. That is, if we know that we can simply drop a "recyclable" plastic water bottle into a recycling bin, we may worry less about our consumption of single-use beverage containers and other material. This is simple economics: when the cost of doing something decreases, we tend to do more of it.
We also recently learned that we are disposing of much more municipal solid waste that originally estimated by the US EPA. However, we are not running out of landfill space any time soon. The problem with sending MSW to landfills is not capacity, but no one really wants to live near one. Here is a link to a summary of a recent study suggesting that living within 5 km of a landfill could cause serious health effects.