From my experience in government: they nailed the user experience (check out http://dsbs.sba.gov for some awesome gov UI), but really overestimated government's capacity to build intelligent technology like this.
I know this will make me unpopular amongst this crowd, but The truth is, I'm far more afraid of data like this getting into the wrong hands because it's being stored improperly or insecurely, than I am of government being malicious with it. Heck, I'm more afraid of my insurance adjuster than I am a malicious cop.