I don't think this is very well-known, at least among people who haven't worked on telephony implementations (? I have no idea where this is commonly used). Never in my life has someone asked me for my DID instead of my phone number.

It's fairly plausible that the people working on this specification were unaware of this pre-existing acronym (which ranked after Defense In Depth, when I searched it), and just said "Oh, we're making Distributed IDentifiers. Let's call them DIDs! That's easy to remember."

When used in verbal conversation, is it generally spelled out like CPU (dee eye dee), or said as a word like RAM (did)?