In this case, I'm saying that the state can leverage the blockchain for infrastructure and DB access/permission/security. I haven't worked in this specific space, but having a state-affiliated key signing off on a blob of data and store that on the blockchain (and using a standardized open-source front-end for state-side or citizen-side view and editing) has potential to be a much more elegant and robust solution than every state agency around the world creating it's own front and back-end.

I agree that in this case it's not about abstracting trust from centralized authority.