Microsoft users :)

Or do you expect the government to understand there are other operating systems out there?

Everyone the government decides can have one, the same way every other government ID works.

IOW, this problem is as "unsolved" as the problem of deciding who's allowed to drive a car, or travel to another country.

Most people in western countries already have id. I think the ship has ling sailed on that.

Most being the operative word. In human-centric bureaucracies, people who don't have ID (for whatever reason: religious conviction, a feud with the relevant government agency, a legal status the computer system was never designed to represent) can still access services in many cases. Naïvely computerising everything will effectively remove rights from those whose paperwork doesn't check out.

ID verification is a universal hammer, to which all problems look like nails, but we shouldn't be so quick to reach for it. Not all of its downsides can be solved with cryptography.