Yeah, it can. But also some other uses. Imagine you want to book a rent a car. To do so, the website wants to make sure you have an active license. The only way is you actually uploading a picture of your license, so they can check against the database to make sure it's valid. Now, they are storing that data. (And all data that can be hacked eventually will.)

With things like this, they can know you have a driver's license without needing to know who you are, what age you are, eye color, height and address.

Governments will attempt to do those things with or without Web5.

Governments also use guns, and people should have guns.