Royal Mail used to be the best return HANDS DOWN over every other leaflet distribution method, and probably for the reason you suggest, it came with the bills etc. That was even at £62 a 1000 when we could get others for £25. BUT i think they have killed the goose in terms of frequency and number the Royal mail deliver, it's now USUALLY 5 leaflets in total, so logistically without a lot of change in their working practice they can only cope by nesting them, they don't have any way to carry them and collate them separately at each house.
Our new teams do just ours and one other, occasionally two others we have clients primed in the areas to call when the leaflet comes and the reward is £10 credit to their account even if they don't have a job done. They just have to tell us they have arrived and how they are folded. It's been a lot of work setting it up but well worth it, our distribution cost has dropped by £25-£30 / 1000 and the response has, in some areas, almost trebled!
We're also getting fewer calls where people are saying "I was waiting for your leaflet, we haven't had one for ages." but are getting calls saying "I've been waiting ages for one of your leaflets again and it's just come through."