I am wondernig what is the reason, if any, that in the national identification cards the names (first and last) are written in ALL CAPS?
Some jurisdictions do that. Others don't (see, for example, the Dutch national identity card).
My New York driver's license is in all caps, and I rather suspect that it's a holdover from the days in which licenses were processed using a computer system that had only upper-case characters.
But that's just a guess. The real answer is that the premise of the question is incorrect.
The League of Nations Passport Conference of 1926 contained suggestions on how christan and surnames should be written:
The question of the entries to be made on the passport form has given rise to the following observations:
- Sufficient space should be provided for the full name of the holder;
- Christian names and surnames should be written either in block capitals or in what is known as English roundhand;
- The surname should be underlined.
It is agreed that christian names need not be translated.
United States Passports that I have seen, never underlined the surnames. Other countries often did. Sometimes spaces between the letters of the surname were used instead of underlining.
With the introduction of typewritten passports, in the United States since 1931-01-02, all entries were mostly uppercase.
Note: The typed letters are red. A passport issued in September 1931 (and later) are black.
A 1934 passport of Moritz Feibusch, which was retrieved from the ruins of the Hindenburg, can be seen here:
I found a few fringe sites that say the concept of a legal name is an identifier issued by the government, hence all capital letters. This explanation doesn't seem too believable to me but I could be wrong.
In my mind it's logical this is just to clearly show your identity. It seems to be more difficult to mix up capital letters than to mix up lowercase letters.