The way I read it is that they can't require that anyone use it, period. I think the "for a public purpose" just refers to the justifications for a requirement, e.g. to protect the public, to stop crime, etc.

I think the bigger issue is that we're now entering an era of "public-private" partnerships, where the government effectively hides behind bodies that "merely assist private entities in exploring private solutions" that will result in de facto laws created by government coercion, but not statutory, so without any right to due process, and in this case, particularly regarding 4th Amendment rights against search and seizure. It's an end run around the constitution.

Furthermore, while the fed cannot recommend that a digital ID be required de jure, it may be required de facto. You may not be able to bank without one.