It makes coordinating your information across many different service providers much more efficient. Here in the Netherlands for example, I can use DigiD to login and pay my taxes, pay for health insurance with a private company, authenticate to my pension plan and a ton of other things.

I cant vote with my Texas ID in Wyoming. A passport might be sufficient to vote in a different state for a national election but I’m admit that I’m not 100% sure on that.

Every government agency in the US doesn’t know who I am without me telling them. And even then if they fat finger the number I could be in for a world of hurt until someone realizes.