Cloth bags take up more volume and weight for the same capacity, and also cost a lot more to make. Of course you can reuse them many more times, and you need to do that to break even, but the former point still holds.
And when I get plastic bags at the grocery store, a third of them end up too damaged to put trash into.
That's unfortunate, but a natural consequence of optimising for profit based on a self-fulfilling prophecy: the belief that the bags will only be used once, leads to them being made so that they can barely be used once. The same optimisation for profit is likely happening with cloth bags too, but it's just not as obvious yet.
That said, there are countless other occasions where a thin film of plastic comes in handy.