This, of course, will help enormously when people throw the bags into large plastic garbage bags, which then end up in landfills...
True, but SF does have a comprehensive composting program for homes. Three carts go out to the curb on trash day: black for garbage, blue for recyclable, and green for compostables. It's just a matter of tossing them into the green container. If anything it'll help the current efforts because people can use the bags for gathering food scraps before tossing them into the bin instead of purchasing special bags like many people do today.