Comment by lxgr
This theory mixes up the distinct concepts of the government, as a trusted entity (where applicable), issuing identity document for the use of its citizens (including in person-to-person or person-to-private-company scenarios), and that of the government requiring its citizens to identify themselves to it on demand.
Sure, its slightly harder to have a government issue credentials to everybody and not have them abuse the possibilities that come with it, but if a society can pull it of, there are vast benefits in many areas of life.
On top of that, the flip side of people regularly not carrying any identification documents seems to be a police force much more eager to arrest people on the spot to figure out their identity. (Presented as an observation without value judgement: This way of doing things does lower the likelihood of the police arresting somebody because of not carrying identification.)