Those used clothes are often more expensive than new.
My wife and I try to shop for clothes for our kids at places like Once Upon a Child. We find George (Walmart) brand clothing there with prices higher than buying new at the local Walmart. There's not a lot of incentive to recycle clothing when it's priced like that.
Value Village is picked clean... There are some "vintage" clothing stores nearby as well... they are shockingly expensive.
It's really difficult to try and recycle clothing and buy or source used clothing When it is priced at the same as or higher then brand new.