There's a big difference between accepting the card and rejecting the card but not snitching.
Its not "snitching"; its due diligence.
You are correct, having the card and attempting to use it is not illegal (as far as I know, heck as of 2002/3 about a dozen states allowed people to use these cards to get drivers license).
But Section 8 USC 1324 makes it a crime, when you reasonably suspect someone of being illegal, to give them aid. I and other TSOs must report it to a LEO (actually contact a STSO, who upon verifying what we have seen, contact a LEO).
You can argue all you want, but it is reasonable for me to suspect that only those who are here illegally will have and use this card (take the person who posted the question that started the current conversation).
Specifically from Section 8 USC 1324:
"(ii) knowing or in reckless disregard of the fact that an alien has come to, entered, or remains in the United States in violation of law, transports, or moves or attempts to transport or move such alien within the United States by means of transportation or otherwise, in furtherance of such violation of law;"
and...
"(iii) knowing or in reckless disregard of the fact that an alien has come to, entered, or remains in the United States in violation of law, conceals, harbors, or shields from detection, or attempts to conceal, harbor, or shield from detection, such alien in any place, including any building or any means of transportation;"
Now, you may not like this, but there it is. Yes, TSA will contact a LEO. We are required to by law, as it is VERY reasonable to suspect this person is an illegal immigrant.