This seems to be a way to get your cell phone out of your hand and into the hands of the police, without a warrant, and your permission.
SCOTUS recently ruled that the police can't search your phone without your permission, absent a warrant. Now you get pulled over, and you have to hand your unlocked cell phone to the nice police officer, while he leaves your site and goes to his car for 5 minutes or so.
Now he has the opportunity to see what else you might have on your phone.
As a bonus, since he has your phone, you can't use it to record your interaction with him.
What is wrong with the piece of plastic in my wallet? It has worked well for a long time. If my State offered it, I might add it to my phone for fun, but I would still have the wallet card to give to a police officer.
Nothing in the article claims this app wouldn't work on an iPod Touch - you can get an older one for less than $100 now - keep it in your car, charged and hidden. If you don't have your license card, you show them your iPod touch. If this app doesn't work on offline devices, I'd say it's not worth installing.
Don't install the app on the device that contains your digital life.