Your ID is (or should be) seen only by AirBnB, not by all guests .... I expect other OTAs might make similar demands in the future .... and the thing is, if we don't comply, they switch us off ..... and you could switch to TripAdvisor / HomeAway / Booking.com, but none of the OTAs are perfect and they all have their "issues" and eventually, we'll probably have to do this everywhere ....
The information you upload is held by a third party company on secure servers, but you are right nothing is ever 100% secure.
However the reality is if you don't do this, you won't be able to host any more on Airbnb, so you have a choice to make. Upload the ID evidence or host on platforms that don't require it.
I have had mine uploaded for four years without issue @Maz5 if that helps?
I have similar concerns; raised it with AirBnB who failed to answer and closed the query! I don’t want to do it, but see I have no real choice. What concerns me is that I’ve been hosting for three years without any of this, so why suddenly now?