You can encrypt data on a blockchain but once that encryption gets broken all sensitive data will be out in the open. I don't think an immutable and public database like blockchain is good for securing our data when securing it means keeping it secret.

Better identity systems can be built than the abysmal ones we rely on now. The potential for cryptography is severely underutilized. What we should do is provide any counterparty we do business with as little information about us as is absolutely necessary to get the job done. As a trivial example, why would anyone need to know our date of birth for age verification purposes? It should be sufficient to prove that that our DOB is earlier than the latest allowable one. It is possible to design hash functions that take our data as input and generate hashes that serve as proofs of what needs to be proven but nothing more.

Social security numbers being accepted as proof of identity is utterly horrible from a security point of view. When someone has your social security number, DOB and full name they have you at their mercy. When sold to criminals that information can be used to commit identity theft and many types of crimes enabled by that. Yet we dole out that information to companies online and offline like nothing.