Doesn widespread use of SSNs help promote fraud and identity theft?
Yes. Identity theft is becoming a sizable problem in the U.S. There are major crime rings, especially in the Orient, that specialize in cashing in on your identity(here). This is also done by individuals in the U.S. They steal literally tens of thousands of dollars in fraudulent transactions in your name, and you get blamed. Creditors may spend years hounding you and ruining your credit to try to get you to pay back what these bandits have stolen. It all begins with your SSN. These thieves usually buy your SSN from a store clerk or low-level government employee. If the identity thieves can get your SSN, your name and address, they can rip you off. People have lost their homes, jobs, and even families, because of identity theft. Everyone who advises about protecting against identity theft, including the federal government, strongly recommends against releasing your SSN to anyone, except for SS or tax purposes.
