A passport is the universal identity document. It's way too valuable to carry around and expediting a new passport is costly and slow. Checks need to be done in person and the passport holder needs to be told in advance about the check (so impromptu checks don't work and expired passports get through, also catching fake passports and the like is hard).
A digital ID as its name says is digital, checks can be done remotely (as often as you want) in a secure environment with physical checks possible in addition to that. Regular and unscheduled checks are possible with a digital id after the initial check both presential and remote. Online checks especially can cover for things like the same id being used in multiple places, it also means employers cannot fudge it as the actual repository of truth lies online. None of this is possible with a passport.
Citizen IDs and more recently digital IDs have been used in Europe for decades now. Having a redundant piece of ID is incredibly valuable.
What impromptu checks would you need this ID for? The use cases I've seen for it are to make sure you are legal to work, and when renting a house, both of which are circumstances that you can be told about beforehand
Think: the ability to verify that the id owner's face resembles the face of the id holder. The ability to check that the id owner address matches that of the id holder. The ability to flag employers containing id owner employees regularly failing those checks. The ability to do this regularly without previous notice to the id owner at national scale remotely or in person is a level of compliance you will never get even halfway with just using a passport number.