Having a single digital ID that is used for everything makes sense from a technical perspective (less duplication, ambiguity, and need to maintain multiple IDs) but from a privacy perspective it is bad. Effectively everything you do online would be tied to a single comprehensive representation of your identity even if the task that uses the ID doesn't require more than knowing "this is a unique person using this service". If user data is leaked then it is easier to tie every digital service being used by a person together since there is a single ID number used everywhere.
IMO fewer things should require ID (e.g. domestic flights) because it opens up the risk of personal data being leaked or misused for often not much benefit.