The limitations on usage are specified in US law (8 CFR 235.1 and 22 CFR 53). All the discussion of reciprocal arrangements with other countries are irrelevant until that law changes.
Why those limitations? See the Intelligence Reform and Terrorism Prevention Act of 2004, section 7209, subsection (a):
(a) FINDINGS.—Consistent with the report of the National
Commission on Terrorist Attacks Upon the United States, Congress
makes the following findings:
(1) Existing procedures allow many individuals to enter
the United States by showing minimal identification or without
showing any identification.
(2) The planning for the terrorist attacks of September
11, 2001, demonstrates that terrorists study and exploit United
(3) Additional safeguards are needed to ensure that terrorists
cannot enter the United States.
The passport card was developed as a mechanism for those who had been accustomed to visiting adjacent territory with only a driver's license, or similar identification, to continue to do so without the expense or inconvenience of a book-format passport.
Is it likely to change soon? That is a matter of opinion, but I do not think you will find many people who are of the opinion that it will.