Once someone gets a hold of the decryption key then what?
All the encryption is then useless. And how many machines all over will hold this key?
There is not one type of key, there are many, and depending on what you are trying to encode, and who can view / change / transmit that information.
There also exists a mechanism to renew keys quickly (milliseconds), and to grant and revoke trusts associate with these keys, so the mechanisms are not quite as easy to break as you suggest with your question.
But again the question is going in the wrong direction. It is already easy to steal / forge / reproduce lots of personal data and security documents. By using encryption which confidently links the real individual physical person to a certain document is a massive step forwards. Sure no system if 100% watertight, but to be able to say that the person stood infront of you is such-and-such a person and to be able to say that with a high degree of confidence is a major step forward for all law abiding people.
Currently all you can say is that an identity document that is currently in the possesion of a certain individual has all the likenesses of the person who has presented it. You cannot even ensure that the identity document is not fake, nor can you actually be sure that this document was originally issued to this person nor that it has not been changed.
With an encrypted link made between something that only you possess (retinal data) and an identity document (remember this could be a card with a chip in it, not just a paper document) you can now say that the person who is infront of you has claimed to possess the same identity for a known period of time (for most people this will be since birth) and that the identification document that they present was issued to them and only them, that it has not been changed since it was issued.
There will always be hickups and fraud, but it will be easier to detect and spotted more quickly, consequentally the decisions made by security personnel will be more accurate with a higher degree of confidence. Which means less waiting, less mistaken identity, blah blah.
I cannot understand why people still think that a photo on a bit of paper is sufficiently good, and are afraid of getting better tools to confidently guarantee their identity. Perhpas becuase it is the Americans who are pushing this stuff slowly forward, it is seen as bad. I'd like to have this type of ID in my pocket all the time so that when I buy something using my credit card, I know that only the owner of my eyes can use my credit card. I will also know that when someone steals my utiliby bill and changes the address on it, they will not be able to use that bit of paper to open a loan in my name at a fake address.
I guess joe public has seen to many scary big-brother-mistaken-identity-in-the-future-innocent-man-on-run-from-authorities type of movies.
