Trust is a way of saying that the identity I presented above is me and not made up or the identity of someone else.
I disagree. Trust is a gauge of how you will behave, and the level of trust required is a matter of the consequences of your behavior in a given situation. Having a fixed identity is one of the components of trust. Even buying a certificate from Thawte or Verisign shows only that... well... someone has bought a certificate from one of those organizations. And we've all seen the reports of stolen credit card databases from organizations whose identity was verified.
What an identity, on the other hand, does for you is let you build trust. Just as an eBay seller has to build a reputation, and a person with no sales history has trouble moving goods at auction, we as individuals need others to vouch for us. But since we have to enter our data anew at each web site we visit, and there's no trustworthy way to tie the "Dan Lyke" who sells stuff on eBay (well, okay, who has tried to sell stuff on eBay, see above) to the person writing this to the one who's left comments on your weblog, there's no way for someone to say "yeah, I trust him" with any sense of surety.
A LID can do that. A single internet identity could let you know that person with the good /. karma is also someone that eBay has run a credit check on. We could list a whole gazillion other organizations that might vouch for an identity if cajoled properly, and you (or your application) could pick some number of them that you trust.
It can't tell you that I'm not also "Anonymous Coward #4172" known for trolling .NET programmers into huge flame wars, but: baby steps.