Mike nails it. In the real world we don't have a personal relationship and id for every place we need id; we just give them something like a birth certificate or passport and they accept it! There's no reason why the online world should work that way, hence the need for digital identity.
When a person has only a handful of accounts, it is reasonable to assume they can manage them. With the growth of services on the internet, it's possible that users might need to have rights assigned to them on computers they don't even know about. It's time for another level of abstraction, which is what the identity folks are all talking about.
Indentity is how we want to abstract our relationships, because we shouldn't be tired to direct personal relationships with each and every server or service on the internet.