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.