Well, PKI is used by at least one country on a national level , it works
pretty well,

http://bankid.com , it is issued for free by all major banks, and there
are other PKI solutions issued by a few other companies which have
national adoption. You pay a bit extra with your mobile carrier  if you
want the private key in a sim card of a cell-phone, but then you have a
mobile PKI solution..

You login to your bank website with the security device (there are two
main types) , and download the personal certificate into the client-side
program ( nexus personal) , and it is valid for one year. This gives you
a wide-range of options in the entire country, as you can use most
government and many government functions automatically without needing a
un/pw, and digital signatures are used to sign statements, file taxes
(automated) , etc.  On the server-side, as far as i know, the
instituting agency/company simply requires a bankid server for
e-legitimation.

Bankid is a nationally subsidized program, and it is mandated for most
local and federal agencies to be compatible with it (many are coming to
speed) , for efficiency, security, and less paperwork (sending
usernames/ passwords via post costs trees, ink, time, and money) -
however the old way is still an option.  I had forgotten about it (as it
is quite ubiquitous now), but just wanted to toss that into the
discussion.. 

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Description: OpenPGP digital signature

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