A current utility bill shows a link to an address; a lot of IDs don't, and from memory passports don't (anyway, they last for years and don't require updates...). Yes, it's not foolproof, but it raises the bar. Most people have access to this thing and are able to send it in - so it's a cheap way to raise the bar.
Possibly you raised such a fuss that you tripped their 'possibly a forger, probably not worth it' spider-sense, so you got more hoops to jump through.
That's exactly my issue. Maybe that's the case in your country of origin, but not here. The ID lists your address and you're required by law to update it whenever you move.
Plus, they got that (address/name, a header of a utility bill), but complained about blacked out passwords/details.
Plus, if your fallback is to send a registered letter to verify an address, why .. not list that from the start and just do it that way? Slower, but less crap.
We won't find some common ground here, of course. I don't think that I 'made a fuss', not before the process became utterly broken and laughable.
Possibly you raised such a fuss that you tripped their 'possibly a forger, probably not worth it' spider-sense, so you got more hoops to jump through.