I can tell you that working for a $30 billion international retailer, we do it for the envirnoment. Being environmentally friendly is part of our corporate culture. We have even spent money on an entire new fleet of delivery trucks that are more fuel efficient, without passing on the additional costs to the consumer.
If we didn't use them at all then what would we use, paper bags are more expensive, not very consumer friendly (even the ones with the handles) and the process of making them and shipping them is just as bad for the environment as plastic bags. As much as we would like it we can't expect every customer to bring in their own bag, but will try and do what we can to encourage them.
You would also be surprised that 20 cents will encourage some people to bring, it may not stop them from making the purchase, but will make them think about it. The Target and a few of the grocery stores in the area actually credit you for each bag used, so they are basically breaking even, they aren't spending the money for the plastic bag, but are giving you that money not to use one. What would be the point of doing this if they were being cheap, the money that they are saving is going right back out the door.