The Democratic party relies on a certain segment of immigrant or immigrant-related citizens to vote in support of them. And if licensing / IDs are perceived to target and identify who is not a citizen (your relatives, friends), then they could lose support. I suppose it could be seen as a kind of "discrimination". And if some social services, policing, etc were to be able to use such ID, then illegal aliens would certainly be more at risk of being discovered or face more stringent (less porous) treatment in the law enforcement system.
I personally think this is a ridiculous situation from every angle, and unfortunately it's all tied up in our immigration and economic policies, so it's hard to disentangle or fix.