Oh I agree, it absolutely is the way to go! If you haven't heard of it, take a look at the Giving What We Can pledge [0].
But most people aren't like you and me. I've had conversations about this with many others, and the most prevalent attitude is the one I described: ask them to buy the more expensive, environmentally friendly product, and they'll decline; ask them whether they would support a law that would require all products to be environmentally friendly, and they'll enthusiastically agree.
If that's how people work, then that's how we have to make policy.