I've seen a few videos / articles along these lines (e.g. https://www.theguardian.com/sustainable-business/2014/sep/16/berlin-duo-supermarket-no-packaging-food-waste) and it seems a very sensible approach to ending the idea of single use plastic packaging. I think the challenge is in adapting the business models of the corporations who provide the world's most famous brands and the large supermarket chains that sell them so that there is an incentive to provide goods in this way, and to realise the potential on a globally significant scale.

The conversations I've had on this topic have come back to the German example on more than one occasion, as you say if you have a perfectly good container it's nonsensical to dispose of that for the sake of getting another. If the container has some value of its own then recycling and reuse is the economically logical option, I've just seen that another contribution describes the notion of ascribing a value to the plastic containers for the same reason, but I guess history has shown that glass is the more practical option for continued re-use.

Well done in finding an example of trying to solve the coffee cup problem with a single material, the designers here seem to have come up with some neat geometry. I'd been thinking along the lines of the paper water bombs you'd make at school as shown here:

http://www.instructables.com/id/How-To-Make-A-Paper-Balloon-Water-Bomb/

My recollection is that these worked pretty well with standard copier paper for the duration you might want to hold the water (before throwing!) which might be about equivalent to how long you'd need to contain a single coffee, but the thermal insulation would need some thought...