Secure User IdentificationStefan Brands tackles the thorny problem of user identification without unnecessary privacy loss in a very readable paper (with pictures here ). It seems to offer a greater level of privacy than, for example, the New Zealand Government Logon Service which is targeted at the same risks of exposure.
Apart from Government, there are other arenas where there are compromises to user privacy. In the Health Sector, collating health records into a common picture may be seen as an administrative convenience, a medical necessity and for the 'common good'. However, labelling everyone with a common identity (in NZ the NHI ) has the same potential for privacy loss and the consequential bad things happening as it does within the wider government arena.
There are of course laws covering who has access to what information in the government and health sectors but that does not prevent accidental exposure or covert action.
There are legitimate reasons for the statistical correlation of data about people (especially in the health sector) allowing this without a common identifier is probably worth a bit of study. Otherwise, the potential need for statistics will be an overpowering argument for a single digital identity.