A few months ago, we started using Meijer's reusable shopping bags, which they sell for $0.99. They also have similar bags at Target. We have found them very usual for other things, especially travel. They are a superb product.
There is a lots of web discussion about these types of bags. In this article, Meijer claims the bags are somewhat popular. Anecdotely, I've seen probably ten percent adoption rates at the stores. I think this will climb significantly over the next year.
I have to imagine that there have been earilier attempts at bringing reusable shopping bags to market. The question is why are they just now reaching the tipping point? While aised "green consciouness" is probably a factor, I think something else is going on. It's related to design (Virginia Postrel outlines the importance of aesthetics and product design in her book The Substance of Style). The bags are very sturdy, but they are also visually appealing and easy to use.
I think once the right design was hit on, the rest was simple. Find the right price point, place them at the front of the store and they sell themselves.
UPDATE: The bags are not canvas, but are made from recycled plastic bags.