My understanding is that insulation needs to
- stay where you put it (not settle down to the bottom of the wall)
- not catch fire easily and not spread fire easily
- breath well enough to let the moisture escape
- and not break down over time.
I don't see how plastic bags could do these without substantial change to their structure.
Current plastic bags are designed to break down over time. Try touching that old grocery bag down in the bottom of the bag bin that has been there for four years. It's brittle and falls apart.
Personally, I wouldn't want to have extra plastic in my living space, especially soft plastic that off-gas as they degrade.
China is accepting plastic bags for recycling from some places (like where I live) but only if it's properly sorted. The people at the recycling centre are extremely militant about proper sorting as about 1% miss-sorting can ruin the entire batch (apparently). Since most of The West is terrible at sorting their recycling, China got fed up with accepting it as most of it ended up in the trash once it got there. The key to solving this is public education campaigns on how to sort your plastics. Or better yet, use less plastic!
A better solution would be to reduce the amount of plastic produced. Our
city had a single-use plastic bag ban for a couple of years and it's amazing how quickly the population could adapt to not having plastic bags.
Lots of little things had to change, like the law requiring all garbage be wrapped in plastic. Now we have two garbage collections, one for organic waste and one for non-organic. The inorganic is so dry, we can wrap it in paper or not at all.
People had to learn to bring their own reusable bags, but after a while, shops started making fun bags and now tourists go around the different shops buying the reuseable bags as souvenirs.
Paper bags are still available for ten cents each and the quality of paper bags has greatly increased so we can reuse them two or three times before transforming them into craft projects, fire starter, or garbage bags.
It only took two years to train the population to get rid of plastic shopping bags. Now the ban has been lifted (temporarily) many of the shops aren't brining the plastic bags back because it says "hey, look at me, I hate the environment!" In the neighbouring municipalities with no bag-ban, it's become difficult to find plastic grocery bags because the shops are voluntarily eliminating them. It makes them look
eco and saves them a surprising amount of money not providing
free plastic bags.
So...insulation as a solution? No. I don't see it. I think solving the source of the problem would be a far greater opportunity.