Air pollution is worse than landfills. Incineration increases our exposure to heavy metals and dioxins. Burning plastic is a fairly nasty process and can only be done "cleanly" at very high temperatures.
Trash also contains stuff like batteries that explode when burned.
Not incineration. Pyrolysis, in an anoxic environment. It's the same process by which syngas is produced, except that the results are longer chain carbons and thus just have to be cracked and distilled rather than Fischer-Tropsch'd into usable feedstocks. You use about 30% of the input mass of organics to power the process (usually the lightest fraction that is equivalent to syngas), and the result is about 10% waste material and 60% usable mass fractions in the fuel-to-wax range, just like a normal oil refinery.
Trash also contains stuff like batteries that explode when burned.