The supposed end of the ID scheme has nothing to do with any love of freedom our new political masters claim to have. It has come about due to its massive unpopularity and sustained pressure from groups campaigning against ID. Whatever the Conservatives or the Liberal Democrats might want us to believe, they are not fundamentally opposed to surveillance of citizens. Indeed, both parties support surveillance and the gathering of data on the population in other areas of policy. The Tory stance on ID cards looks particularly shaky and opportunistic. During the '90s, Conservative Home Secretary Michael Howard proposed an ID scheme long before New Labour's database plans. The Tories have supported ID cards before and they might well swing behind them again.
An ID scheme for non-nationals will remain in place. This explicitly discriminatory measure means that the government endorses spying on non-UK nationals. Crucially, it means that the ID scheme is not dead. It will live on and future governments, or even the current government, have the possibility of expanding it at a later date to encompass other groups deemed to be undesirable e.g. benefits claimants.
Dissatisfaction with the authoritarian attitude of the previous government has led to a partial triumph over the ID scheme. However, we must finish it off completely so that it can never be brought back. That means campaigning for an end to ID cards for foreign nationals and vigilance against the creeping return of national identity databases.