You're trying to frame the justification as something that will help the residents of California, but that's not the motivated party here. Instead, it should be framed as what helps the inevitable grift perpetrated through a government contractor to build this system? In that case the justification is a little more clear:

1. Its complicated enough to hide large costs and perhaps budget overruns

2. It uses a bunch of technology hype lingo, like 'blockchain' and 'NFT', to let the political DMV leadership market to the people that they are embracing the future

3. Its underlying mechanism is at best useless, so there will be no pressure on the contractor to deliver anything of value

What a win!

The DMV is the obvious centralized source of truth for this data. It's ridiculous that anybody would even think to reach for a blockchain for this use case. Contact your assemblyperson.

This was my first thought as well. I don't see what a blockchain will provide that a database can't.