If it's in any way reliant on a central database, or even PGP, I fail to see how you could fake an ID besides finding someone that looks like you and sending that in your place.
And it's not like there isn't already a black market of stolen IDs already. Get a photo of your client, run it against a database of stolen info, get a match. I understand I'm simplifying this immensely, but if the system can be broken, then it will be exploited. And really it's not if, but when.
I can see this being a useful technology in the case of law enforcement, pharmacies, doctors offices, or anywhere you would need to check in with your driver's license.