I am not ignoring that fact. However, employers argue against rules cracking down on their hiring of illegals by complaining that they can't tell if ID is false or not. OK, now the IDs will be of much higher quality. Which means this law can eventually be coupled to much stiffer penalties for hiring an illegal.
In the end, illegal immigration will be curbed by three actions - better border control, cutting off illegal access to government bennies and services, and cutting off the demand for illegal labor by making it too risky to hire illegals. Improving standards for driver's licenses and outlawing their issuance to illegals is a big step forward towards the second and third actions.
Your 3 suggestions are ok in an ideal world, but not in the real world. The border ought to be patrolled better but even then it will be porous. Also there are unassimilate millions here already. Your second suggestion is getting less likely by the day. I support the Shenandoah free health clinic, it's independent of the government and gives free health care to anyone. The government is able to pay for less and less of that kind of care, that's why I support the clinic. Third, it's getting more risky to hire real workers. Just trying to deduct the employees expenses from revenue will make it more likely that you will get audited. The small businesses that hire the illegals can't easily be caught using that labor except with a sting. There's no paper of any kind to go back to investigate. Your suggestion works for large businesses but that's not where the problem lies.