You are confusing things. Blockchains indeed dont work irt 'physical' things. But 'identity' is just an abstract notion. Its just a registration of names and pointers, and signatures determine validity. So that should work fine.

The problem is that blockchains dont scale well on the one hand and you have an incentive problem on the other. 

So Alex is correct in this statement: we know how to do decentralized global state, and we barely know and for the most part are still finding out over time if it works for money, let alone something else.

Accepting that, leaves us with putting keys at the center of the system, and as such you have no option other than 'combining identity and authorization'. Your complaint against that is the same old trap that makes people want to look at blockchains or whatever, because you need a registry linking the two if you dont want to combine them.

If your conclusion is that putting keys at the center of things (not an unreasonable possition btw) is unwise/wont work, then give up on Bitcoin and give up on Nostr. 

 PS: if you talk about persons and not persona (meatbags vs identities), they you are correct. Tagging meatbags on a blockchain is useless, just as with houses or bananas 

 I welcome being disproven, but I don't think you've done that. Blockchains have a head, and the head is advanced somehow. How does your identity chain advance? Who has the authority to advance it? Without proof of work, you have a Merkle tree. Without rewards, what is the incentive to compete proof of work?

Regarding identity and authorization, you haven't even made an argument. Mine is https://github.com/nostr-protocol/nips/pull/1450