We are working on this better model in the Ethereum ecosystem via technologies like Zero Knowledge Proofs and private attestations. The Ethereum Attestation Service has been using the example of proving to the bartender that you are over 21 without disclosing your birth date. https://docs.attest.org/docs/core--concepts/privacy

This is all new and rapidly evolving technology but giving apps / agents / others just the information they need to know while having a credibly neutral, private, and trustless database mediating is a true cypherpunk vision of how the internet should work and it's being built by people with the right ethos and principles to be as reliable, well engineered, and long lasting as the internet itself.