We live in a world where our online IDs are in the hands of the government and banks, and we rely on them to keep it secure. Blockchain IDs on the other hand, put you and you only in control. Therefore, you can store all your passwords and any other personal information on the blockchain, eliminating the need of passwords in everything. In the future, these ID services could be applied to government services, medicines and any other record keeping agency.
Blockchain system exist to combat greed and middlemen and to give individuals ultimate control of their identity and activity. In a blockchain future, we will see a world where our medical records are immediately available if we are in an accident; where online voting was possible; and where transparency was paramount and greed is disincentivized.
Maybe you are talking about a blockchain based storage where the fingerprint of the data (a very tiny amount of data) that stored in a separate storage location is recorded on the blockchain, this keeps the data safe. It is very inefficient to make blockchain a storage for large files, the nodes will have trouble verifying all the data as it will take time. The best application is the online voting, this will keep corruption and internal manipulation away from the process. On the blockchain based IDs, I can only see it as a tool to verify the data, the information of in the ID can be verified on the recorded data fingerprint on the blockchain, again this ensures that the said identification data is legitimate.