Your statement is incorrect. Texas state driver licenses can be used as a form of identification in multiple countries without being a travel document.
Yeah, there are a lot of IDs that are not travel documents, but are very useful when dealing with government and private sector across the world. For example the ID of an EU country outside the EU does not work as a travel document, but it is still an accepted ID.
I travel a lot in West Africa, and you often have to show your photo id to corrupt police and bureaucrats - and sometime they ask for bribes just to give it back to you. A Palau id is worth it just for these situations - it is an actual valid id issued by a sovereign country that isnt a disaster if you lose - and I believe Palau would give you a new one easier and faster than an EU country would if you lose it by the way.
But also for digital nomads, access to a country like Palau is perfect, you dont have to commit to stay in Palau a year or two, you can stay your visa allowance + 180 days with it , which is sufficient for most people, and Palau really doesnt tax foreign income (even if you run your foreign company from Palau). When you are not a tax resident anywhere and you need a country put your official residency in, Palau is an option (in the same way as Paraguay).
And besides dealing with police/bureaucrats/government, here are examples in Africa where a foreign photo id is accepted and often required: when getting a local sim card, when verifying your mobile money account to lift the limit on it, when receiving DHL packages, when buying stuff on jumia (like amazon for Africa), when accessing expositions, checking in to hotels, and yes also when opening an account at a local EMI.
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