Sounds like you believe a hardware wallet is infallible.
The idea of a global personal ID system is to have it to generate anonymous coin addresses. So that the coins would be safely stored on the different block chains without needing to have private keys to worry about and keep safe oneself or trust a third party to manage. The main drawback is that it could be used by governments for Orwellian control.
And how is an ID system supposed to work without private keys?
I was saying that blockchain technology allows us to create a new decentralised type of ID verification. Like with Namecoin, you could store your ID information there, if I knew you then I could also store my verification of your information.