US passport cards have limited usage:
Entering the United States at land border crossings and sea ports-of-entry from:
- Canada
- Mexico
- The Caribbean
- Bermuda
The passport card cannot be used for international air travel.
Why the limitations on usage and is it likely to change?
The passport card is a card -- it doesn't have any pages to it, thus there is no place for visas or entry/exit stamps.
Thus, it can only be used to travel to places where no visa is needed and where there are treaties in place to ensure that enough data is exchanged between immigration departments so that they can keep track of you without stamps.
As the use of the cards usually involve bilateral and reciprocal treaties -- and few countries have passport cards to reciprocate -- it's unlikely that more countries will accept American passport cards in the near future.
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 States vulnerabilities.
(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.
Why the limitations on usage?
In order for other countries to accept a document from a different country the two must have some sort of an agreement between each other (or at least an official declaration from one of the parties involved). For passports, this is usually done when the two countries establish diplomatic relations and there are also international agreements on the matter such as the ICAO guideline on the issuance of travel documents.
But identity cards are a relatively recent innovation in international travel, so there aren't any international standards on their acceptance. Likewise most countries still use outdated practices such as visa stickers and passport stamps, instead of switching to a fully electronic system. So in order to overcome inertia you need a good motivation, such as:
So let's take a look at the US passport card and how the reasons apply there:
I couldn't find any official rankings, but I suppose that most Americans travel to Canada, Mexico and the Carribean for vacations (all of which accept the passport) card.
The next most popular choice would be the Schengen area, which would be hard pressed to accept non-EEA ID cards as there currently isn't a Schengen-wide database of entries and exits, so it would be difficult to track US citizens entering without a passport. You could of course issue some sort of an entry-exit form instead of stamping the passport, but that would require a major change in the Schengen agreement which would probably be too expensive given the potential increase in the number of American visitors.
The only country where I could expect a change would be the UK, but this would have to be coordinated with Ireland as the two countries are part of the Common Travel Area. The UK already has a procedure for issuing an entry-exit form and they do have an electronic database of all entries and exits, so it should be relatively painless.
But most importantly the US itself would first need to allow citizens to use the passport card for air travel, as few people wish to travel outside of North America by sea. In its current form it's only usable by people living on the border and tourists going on Carribean cruises.
As for people living on the border - Canada and Mexico already accept passport cards and the US doesn't share any other land borders. Originally this was the only reason why those cards were created in the first place (see @phoog's answer).
Is it likely to change?
At this point we can only speculate. As of 2018 the answer is that there aren't any specific plans to expand the usage of the card.
