Not talking about Lufthansa specifically, but ID selfies have become a thing over the last year or so. They're annoying, but expect to see more of this in future.
Look at it this way: with the increase in people conducting business relationships entirely online, it's increasingly commonplace for people to submit scans of their ID to open an account with some organisation that needs to check ID, such as a financial organisation (where previously we would probably have visited their offices and shown our ID).
As a consequence, there are potentially lots of companies that have scans of our IDs, and it's an increasing concern that, when companies suffer data breaches, ID scans might be amongst the data stolen. Personally I've given scans of my ID to enough organisations over the last few years that I'm quite pleased that people are realising that the fact that someone has got hold of one of those PDF files most definitely shouldn't be taken as definitive evidence that they're me...
That said, a simple selfie of you holding your ID is a very poor solution - there's nothing to stop such selfies being stolen in data breaches in future, either. A better way of doing this would be to ask you to take a selfie of yourself holding your ID and a note saying "For Lufthansa only". I definitely hear of this happening now, at least in the cryptocurrency space. And cryptocurrency exchanges seem to be at the forefront of these thiings, given the fact that they tend to conduct busienss enitrely online, and they have some *very* wealthy customers. Where they lead, other companies seem to follow...
How good any of this really is at deterring fraud all depends on how good they are at spotting photoshopped selfies. But I guess it makes it harder, at least. Maybe that's all you can hope for....