Most PET doesn't make it back into the loop. There can even be more demand for rPET than there is supply, which will definitely affect places like AU that mandate rPET use. There is also the problem of maintaining the needed quality of the material throughout the loop, as some PET products require higher standards, so some rPet drops out eventually. Even here there isn't a perfect system. I'd guess that aluminum, a similar "endlessly recyclable" material, has the same issues.

The real problem is that the first "R", "Reduce (consumption)" was quickly forgotten in a consumer world. Add to that planned obsolescence and it's no wonder how we got here.