I actually don't know much about this law and therefore have no opinion on it, but what does frustrate me is this belief that identity verification is an incredibly important part of airline security. Identity verification is a means of verifying that you are who you say you are. It is not a method to detect whether you are a person who wants to blow up a plane. This obsession with identification as a preventative security measure is at best wrongheaded and at worst, as I suspect, simply a convenient excuse for a separate agenda.
...semi-related is Lou Dobbs' obsession with illegal immigrants opening bank accounts or having credit cards or whatever. It is true that the ability to do these things makes it easier to reside in this country illegally, but it's also true that meeting legal residency and employment requirements are not actually legal requirements for having a credit card or a bank account. Mrs. Atrios has a bank account in a country where she isn't legally allowed to work or stay for an extended period of time. Lots of people have foreign accounts. Our system of international finance and commerce rather ensures that this is the case.