Lots of options here.
Genuinely asking, how does that qualify as "eep"? Is renewing onerous or expensive in Germany? I ask because in the US, renewing a license is usually cheap and done quickly online, except for about once a decade, they require a new photo (which itself doesn't take too long with an appointment).
We don't live in Germany so she has to get a swedish one now anyway.
Yes, it's been online since as long as I can remember. 25-ish years probably.
They can be used for land and sea entry to the US. They serve as ID on domestic flights and for I9 employment verification.
Many countries technically require you to always travel with national ID or require it for traveling on trains (since they have national IDs, unlike the US). But passports are bulky and American travelers have been taught to leave them in safes or buried in bags where they are hard to steal. A passport card can be kept on hand 24/7 in case a national ID is needed.
In the event you lose your actual passport after traveling abroad, they would save a ton of time at the embassy since you have a form of passport already on you. Compare this to the panicked alternative of trying to get a replacement with a photocopy of your passport (which standard travel advice says you should have for this reason) and somehow getting a birth certificate.