The serious side-effect is that it makes it extremely difficult, if not impossible, for visitors buy a local SIM card for their mobile phone in order to avoid the rip-off charges that nearly all mobile phone companies charge for roaming. I guess governments are in league with the mobile phone companies in this respect.
When I visited Australia and bought a local SIM card it took me ages on the phone to register, since I didn't have whatever the Australian equivalent was of an SSN number, and the whole process cost me a lot of time and money, making the SIM-card purchase only marginally worth-while.
Fortunately the UK doesn't (at present) require SIM card registration, so visitors to here shouldn't have that particular problem.