The clearest end point for this is some government issued digital ID that just asserts who you are, acts as a login etc.
You can see this as a stepping stone to there. if you squint.
Is it the idealism of the 70s coke to life? No. Is it some sane compromise - I think so.
What if we cannot trust our government ? Sorry it is pretty sure that no internet is going to solve that. That's on the real world.
Already exists in a bunch of countries. Works better in some than in others.
The issue is that you don't want everything tied to that ID. In a less than ideal world, ideally the ID would just attest that some random pseudo-ID is real. Like Webauthn, kinda.