The main reason we can show our physical government-issued ID card to someone in a shop in relative safety is that it’s a human looking at it with their eyes, which do not have the ability to record and permanently store in machine-readable form all the information on it (such as a photo) that would identify their customer. (Of course when they hook up face recognition systems to their surveillance cameras we have other privacy problems, but that’s another story.)

The same thing cannot so easily be done across the Internet. Something like it may be possible in theory, with some caveats, although it’s hard to tell for sure until we see an actual design document for such a system that is complete to the point where we could examine the details and see if it might really work in practice. Nobody seems to have got that far as of yet. All the actual proposals that I’ve seen sacrifice privacy for convenience of implementation because doing otherwise would be very complicated and difficult.