[Zippogriff]

Indeed, there must be some reason no such thing has materialized from the market, despite ongoing problems caused by its absence.

I'd guess it's one of those things where network effects make it hard to get off the ground, and given the nature of it, especially hard to get off the ground without government buy-in from the beginning, as so many of the ways it'd be useful for saving time and money and reducing risk are tied to interaction with the government. If a market-based solution for it were desirable, for whatever reason, defining some clear and interoperable standard at the government level would probably be necessary to make the market viable, no matter how much latent demand there may be.

Further, imagining the user experience of a non-heavily-regulated/standardized ID market, it seems like it'd necessarily be so hellishly bad it'd never gain adoption. Having 5 different IDs and sometimes having to get new ones or drop an old one seems no better than using credit cards and our social security numbers as IDs, like we do now. It seems to me the epitome of something that can't possibly be any good as a market solution, unless it's so monopolized or regulated that it's indistinguishable from a government solution, except somewhat less straightforward.