That's a rather handwavey statement.
The hypothetical presented is essentially a highly regulated walled garden. "Bad guys" would be blocked or cited. If all content is tied to an ID, yes it would work.
China has shown that for the most part you can regulate the majority of discourse in an online space if you wall it off to the bit you control. Not sure how this is different.
Not that I agree with it. Not a fan of the suggestion myself.