I don't have this problem in the city, but apparently in suburban America, dead leaves are a big deal. Suburbanites have to rake them up off their lawns and put them in large paper bags out by the curb, and a composting company comes by to pick them up. It's difficult to get the leaves in the bags and if it rains, forget about it—the bag disintegrates.
Paul Kolada was the principal of an Ohio-based ID firm, one of those workaday companies that does design for companies like Lowes and 3M but whom you've never heard of due to the relative anonymity of our field. Around Christmastime one year, Paul observed Christmas trees being sold out of lots and wrapped in plastic netting for transport, a familiar suburban sight.
This sparked an idea, and after 18 months of development he came up with the Dsolv, a bag that looks like plastic netting but is made out of a plant-based resin. As you'll see in the video below (of Paul's wife and partner, Lois), it's easy to get leaves into by using the spring-loaded sleeve, and the bag is not just biogradable, it's compostable. It eliminates the need for paper bags, is easier to carry, does not dissolve in the rain, and best of all it can be thrown right in with the other compost.
It's not unreasonable to think this could be shrunk and adapted for grocery bags. Most people use plastic grocery bags once, and then the plastic stays around forever. I'd much rather buy two of Dsolv's handles, shop at a store that stocks the bags, and compost them with a clean conscience.