Cheaper alternatives
It's a free market... if someone's shelling out that much just to generate demand, seems like now would be a good time to introduce a bit of competition to the market. Peferrably it would be a scheme that undercuts the state's and provides some actual security too.
I reckon that if a scheme designed primarily to target the current suggested purposes - i.e. verify the owner's age for alcohol purchases, and verify the owner is permitted entry to a particular place, and can be demonstrated to perform that function cheaply and reliably then it'll be a winner with many potential folk.
So here's my thought - an item the user physically possesses which is essentially a blank canvas, but with two methods to interact with it. The challenger has to have provable authority to test a particular assertion (e.g. owner is over 18). The owner then has to approve the challenge, (e.g. by knowing a secret code, or even through a *shudder* hashable biometric). Item then responds to challenger, positive or negative.
This item could be a key to a rotten, expensive third-party database, or a cheap or even free gadget just for performing the hashing functions. I think the reg has already suggested using mobile phones in the past. That's got to be the winner. Everyone's got one so there's zero outlay for hardware. It has the processor for doing the hashes - screen and keypad for interacting with both parties - non-volatile memory for storing the credentials - even a camera for inputing the challenges via QR codes.
So when the user wants starts interacting with a new body of challengers (e.g. licensing authority of a particular county council), he presents his phone (or whatever form it physically takes) to them, and they add whatever credentials they deem they want to be able to verify. It's up to each body to determine the veracity of the information at the point/time of adding them, but after that they're set in stone.
Acme company provides hashing software for the phones for a nominal fee - via a chaged text message even, and software for generating the encrypted credentials, and printing QR codes for the individual challengers. Then it rides the wave of public demand generously created by the state's advertising campaign and makes lots of sales, thus profit!