TracNJack,
Yes, I'm sure a DD-214 would do the trick since that is what is required by the VA or any military branch for proof of service. I just think a smaller ID Card with your name, service dates, DOB, military branch, etc., but not necessarily a photo. This would help the Vets to get the various discounts they deserve without having to carry around a DD-214. Obviously, if you were applying for VA or any other military benefits, you would need the DD-214.
As for the fear of someone counterfitting the Veterans ID Card, it's not a big deal, and it would not be any harder than forging a DD-214 with the right computer software.
...Rich