I agree that having those kinds of rules not only controlled by the DMV, but shrouded in secrecy, could be problematic. However, I think it could be more of a problem trying to write a law that defines what a person's name is. Maybe Vermont is much more homogeneous than my area, but it could be a big challenge here, with so many people from so many different parts of the world, many of which have very different naming protocols, and of course, even names using different characters, but that's a whole other issue... [And then there are people like Prince... At least the Representative isn't trying to define a signature!  ]
The biggest challenge may be that once a data base is designed and implemented, trying to change it might have wide ranging implications and could be very expensive, especially if used across multiple agencies. I suppose it depends on what kind of computer language it uses, etc. [I did a very little bit of data base design work decades ago, but have no idea what's changed or how much, so I know just enough to be dangerous anymore. ]
What I DO think would be a great idea (if feasible and not already handled in every state) would be to make sure the various "name" fields in databases for IDs are big enough to handle long names and that there are enough of them. (Even trying to define a "Last Name" can be challenging in some cultures.) Most of us have probably seen examples, like people from Hawaii (with traditional Hawaiian names), hyphenated names, people with four or more names, etc. Over the years, I've had a number of people claim the DMV told them there wasn't room for their entire name, which I'm usually skeptical about, even though I've never had a valid reason to suspect any deceit. I've also seen some who did manage to get a long name on their DL or ID (and, of course, I'm mostly talking about in CA.)
Unless we completely convert to biometric IDs (which I don't believe are yet accurate enough to justify doing so), I suspect this is an issue that will be around for a good long while. That's probably a good thing for us... 
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