All activities related to official "papers" even if they are in fact in an electronic form should be governed by the state.
Only state can enure necessary protection and impartiality.
A state can run this service without looking for profits and therefore it does not have to compromise quality.
By having an unique provider it can quickly becomes a captive market.
An example is telephony. The move from a single state-owned provider to a multitude of private suppliers caused tariffs to topple without affecting services for the users.