You can prevent the retaining of data if you want.
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How? What is physically preventing them from storing an image you upload of your ID to a government owned or managed platform? Because the other option is banning such retention by law, except you CANNOT assume the government won't be a bad actor and ignore it or find loopholes.
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If such a technical solution exists - great, let's roll it out after we've proven it's absolutely safe and secure. But I've yet to hear of such a thing. If you know of it, please do enlighten me.
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Cryptographic / Zero-Knowledge Proofs is the closest to a safe system that I know of.
The EU digital identity wallet is being built on this system.

But sure if your under a government that is oppressive they can screw you over. But they can even if you don't have digital ID.
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