You might not think asking for photo ID is good service, but I wouldn't criticise them for it, especially as it's only relevant to Paypal or gift voucher transactions - seems fairly reasonable to me. I do carry my driving licence in my wallet though, so I wouldn't have objected even if the request to show it had been a surprise.
I do tend to read the small print with online orders though, especially around documents needed for things like picking up goods, collecting hire cars or taking flights.