there are various legal reasons (e.g. parole) why you might be denied a passport that have nothing to do with whether credit should be extended to you.
EDIT: After coffee, I'm even more convinced this is a good idea. Better to issue the passport and have the identifier of who you don't want to travel vs not issuing it and then losing that person in the noise....because of not having a national ID card system.
A passport should be freely provided to you by your government as part of being a citizen.
I'd venture to guess that if you were making minimum wage and living in a place that was either a 700 mile drive or a $1000 airplane ticket from an international border, you might understand why it seems unnecessary. (Do you honestly believe that most non-traveling Americans are doing it because they don't have a passport?)