When Vermont started offering the driver privilege card (not REALID) (and non-REALID non-driver ID card) the media was saying so the state could keep track of traffic tickets issued to foreign persons who lacked sufficient credentials to get REALID, and so they could get auto insurance so that when they smashed into the car of someone here lawfully, there would be a way to pay for the damage. But as a notary and charity volunteer who’s checked a lot of IDs, I’ve found that most people with driver privilege cards were obviously Vermonters who’s families had been here for generations. I accepted these cards as IDs for notarizations, and as proof of eligibility for gift cards from the charity.
I don’t know why so many US citizens living all their lives in Vermont couldn’t come up with credentials to get a REALID; it wasn’t my place to ask. Wild guess: they just aren’t very organized, and couldn’t manage to visit the town hall to get a birth certificate, then visit Social Security to replace their lost Social Security card, before they went to renew their driver license.