The author of this article in The Register says it better than I could:
The plan underlying Fallujah’s ID scheme and phased return may be an effort to stop it reverting to a hostile no-go area for security forces, but it’s doubtful that this could entirely work. It won’t be possible to stop arms and insurgents who haven’t been issued with ID from infiltrating an area of this size, nor (once they have) will it be feasible to operate intensive ID checks that could maintain a ‘clean’ population. By keeping sufficient forces there and keeping a tight lid on the movement of the inhabitants it may be possible to stop Fallujah from blowing up again, but that isn’t of major significance against the backdrop of the rest of Iraq, and most of the things governments anticipate they could do with biometric ID in a peaceful society aren’t going to be particularly relevant.
At the moment, however, the biometric factor has a relevance in terms of producing some kind of local census backed up by a difficult to forge ID that can be tied to the individual. In areas that have been secured, it will be possible to do a local check on the ID, but that clearly only applies in secured areas where the population has submitted to the ID programme. And as the marines are not going to be able to secure, Fallujah-style, the whole of Iraq, it’s difficult to see this one as anything other than a weird experiment without any obvious long-term pay-off.