I've only seen the blue felt bag once, when buying my wife some (cheap) jewelry. For items big enough, they use plain blue wrapping paper. That's what I usually see. It seems like a perfectly adequate wrapping job to me -- certainly better than my notoriously uncoordinated self would do.

For the record, Amazon charged me 3.95 per item for gift wrapping. I don't know if it changes based on the size of the item, whether you're a Prime member (I am), or other factors. But it's not always $6.